As filed with the Securities
and Exchange Commission on
August 5, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BRUNO'S, INC.
(Exact Name of Registrant as Specified in its Charter)
Alabama 63-0411801
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation or Organization)
800 Lakeshore Parkway
Birmingham, Alabama 35211
(Address, including Zip Code, of Registrant's Principal Executive Office)
1996 Stock Purchase and Option Plan
for Key Employees of
Bruno's, Inc. and Subsidiaries
(Full Title of the Plan)
------------------
William J. Bolton
Chairman and Chief Executive Officer
Bruno's, Inc.
800 Lakeshore Parkway
Birmingham, Alabama 35211
(205) 940-9400
(Name, Address, including Zip Code, and Telephone Number, including Area Code,
of Registrant's Agent for Service)
With Copies to:
David J. Sorkin, Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3954
(212) 455-2000
------------------
Approximate date of commencement of proposed sale to the public:
<PAGE>
From time to time after the effective date of this Registration Statement.
CALCULATION OF REGISTRATION FEE
<TABLE>
<C> <S> <S> <S> <S>
Proposed
Maximum Proposed Maximum
Amount to Offering Aggregate Amount of
be Price Per Offering Price Registration
Title of Securities to be Registered Registered Share <F1> <F1> Fee <F1>
Common Stock, $.01 par value per share 2,050,000 $12.00 $24,600,000 $8,483
</TABLE>
[FN]
<F1> Pursuant to Rule 457(h) under the Securities Act of 1933, the proposed
maximum offering price per share, the proposed maximum aggregate offering
price and the amount of registration fee have been computed on the basis
of the price at which common stock under the Plan will be sold, and the
price at which options under the Plan may be exercised.
<PAGE>
Item 1. Plan Information
Not required to be filed with this Registration Statement.
Item 2. Registrant Information and Employee Plan Annual Information
Not required to be filed with this Registration Statement.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents, previously filed by Bruno's, Inc. (the
"Company" or the "Registrant") with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Act of 1933, as amended (the "Act"),
are hereby incorporated by reference in this Registration Statement:
(a) Transition Report on Form 10-K for the transition period
ended January 27, 1996;
(b) Quarterly Report on Form 10-Q for the quarter ended April 27,
1996; and
(c) The description of the Company's Common Stock set forth in its
Registration Statement on Form S-4, dated July 17, 1995, and in any amendment
or report filed pursuant to Section 12 of the Exchange Act for the purpose of
updating those descriptions.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), after the date of this Registration Statement and prior to the filing of
a post-effective amendment to this Registration Statement indicating that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference into this
Registration Statement and to be part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities
Not required.
Item 5. Interests of Named Experts and Counsel
Certain legal matters in connection with the Common Stock offered
hereby are being passed upon for the Company by Michael Conley, Esq. Mr. Conley
is an employee of the Company and is the beneficial owner of 1,710 shares of
Common Stock.
Item 6. Indemnification of Directors and Officers
<PAGE>
Sections 10-2B-8.56 and 10-2B-8.56 of the Alabama Business
Corporation Act (the "ABCA") allow indemnification by a corporation, under
certain circumstances, of any person who was or is a party (or is threatened to
be made a party) to any threatened, pending or completed claim, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that he or she is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise; provided, that such
person acted in good faith and in a manner he or she reasonably believed to be,
in the case of conduct in his or her official capacity with the corporation, in
its best interests, and, in all other cases, in or not opposed to its best
interests and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. A corporation also has
the power under Section 10-2B-8.57 of the ABCA to purchase and maintain
indemnity insurance against such threatened, pending or completed claim,
action, suit or proceeding on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or who is or was serving at the
request of the corporation as a director, officer, partner, trustee, employee
or agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise.
In accordance with Section 10-2B-8.58 of the ABCA, the Amended and
Restated Articles of Incorporation of the Company provide that every person who
is or was a director or an officer of the Company shall be indemnified by the
Company to the fullest extent allowed by law.
The Company also maintains officers' and directors' insurance
covering certain liabilities that may be incurred by the Company's officers and
directors in the performance of their duties.
Item 7. Exemption from Registration Claimed
Not Applicable
Item 8. Exhibits
The following exhibits are filed as part of this Registration
Statement:
4.1 Amended and Restated Certificate of Incorporation of the
Company (filed as Exhibit 3.1 to the Company's Transition
Report on Form 10-K for the interim period ended January
27, 1996 (the "Annual Report") and incorporated herein by
reference).
4.2 By-laws of the Company (filed as Exhibit 3.2 to the Annual
Report and incorporated herein by reference).
4.3 1996 Stock Purchase and Option Plan for Key Employees of
Bruno's, Inc. and Subsidiaries
4.4 Form of Management Stockholder's Agreement
4.5 Form of Non-Qualified Stock Option Agreement
<PAGE>
4.6 Form of Sale Participation Agreement
4.7 Registration Rights Agreement, dated August 18, 1995, among
Crimson Acquisition Corp., Crimson Associates, L.P. and KKR
Partners II, L.P. (filed as Exhibit 4.5 to the Annual
Report and incorporated herein by reference).
4.8 Warrant, dated August 18, 1995, to purchase 9,917,400
shares of Common Stock of the Company (filed as Exhibit 4.3
to the Annual Report and incorporated herein by reference)
4.9 Warrant, dated August 18, 1995, to purchase 82,600 shares
of Common Stock of the Company (filed as Exhibit 4.4 to the
Annual Report and incorporated herein by reference).
5.1 Opinion of R. Michael Conley
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Arthur Andersen LLP
23.3 Consent of R. Michael Conley (included in Exhibit 5.2 of
this Registration Statement)
24 Power of Attorney (included in Part II of this Registration
Statement)
<PAGE>
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes: (1) To file,
during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement;
(i) to include any prospectus required by Section 10(a)(3) of
the Act;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
Registration Statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement.
(2) That, for the purposes of determining any liability under the
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) That, for purposes of determining any liability under the Act, each
filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of
the Exchange Act that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Act may
be permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
<PAGE>
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Birmingham, State of Alabama, on this fifth day
of August, 1996.
BRUNO'S, INC.
(Registrant)
By /s/ William J. Bolton
-------------------------------
William J. Bolton
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints William J. Bolton and James J. Hagan,
and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) and supplements to this Registration Statement, and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or either
of them, or their substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<PAGE>
Signature Title Date
Chief Executive Officer and August 5, 1996
/s/ William J. Bolton Chairman of the Board of
- ------------------------- Directors
William J. Bolton (principal executive officer)
Chief Financial Officer August 5, 1996
/s/ James J. Hagan (principal financial officer)
- -------------------------
James J. Hagan
Controller (principal accounting August 5, 1996
/s/ William D. Walters officer)
- -------------------------
William D. Walters
Director August 5, 1996
/s/ Henry R. Kravis
- -------------------------
Henry R. Kravis
Director August 5, 1996
/s/ George R. Roberts
- -------------------------
George R. Roberts
Director August 5, 1996
/s/ Paul E. Raether
- -------------------------
Paul E. Raether
/s/ James H. Greene, Jr. Director August 5, 1996
- -------------------------
James H. Greene, Jr.
/s/ Nils P. Brous Director August 5, 1996
- -------------------------
Nils P. Brous
<PAGE>
Director August 5, 1996
/s/ Ronald G. Bruno
- -------------------------
Ronald G. Bruno
/s/ Robert G. Tobin Director August 5, 1996
- -------------------------
Robert G. Tobin
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
4.1 Amended and Restated Certificate of Incorporation of the Company
(filed as Exhibit 3.1 to the Company's Annual Report on Form 10-
K for the interim period ended January 27, 1996 (the "Annual
Report") and incorporated herein by reference).
4.2 By-laws of the Company (filed as Exhibit 3.2 to the Annual
Report and incorporated herein by reference).
4.3 1996 Stock Purchase and Option Plan for Key Employees of
Bruno's, Inc. and Subsidiaries
4.4 Form of Management Stockholder's Agreement
4.5 Form of Non-Qualified Stock Option Agreement
4.6 Form of Sale Participation Agreement
4.7 Registration Rights Agreement, dated August 18, 1995, among
Crimson Acquisition Corp., Crimson Associates, L.P. and KKR
Partners II, L.P. (filed as Exhibit 4.5 to the Annual Report and
incorporated herein by reference).
4.8 Warrant, dated August 18, 1995, to purchase 9,917,400 shares of
Common Stock of the Company (filed as Exhibit 4.3 to the Annual
Report and incorporated herein by reference)
4.9 Warrant, dated August 18, 1995, to purchase 82,600 shares of
Common Stock of the Company (filed as Exhibit 4.4 to the Annual
Report and incorporated herein by reference).
5.1 Opinion of R. Michael Conley
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Arthur Andersen LLP
23.3 Consent of R. Michael Conley (included in Exhibit 5.2 of
this Registration Statement)
24.1 Power of Attorney (included in Part II of this Registration
Statement)
Exhibit 4.3
PLAN DOCUMENT
1996 STOCK PURCHASE AND OPTION PLAN
FOR KEY EMPLOYEES OF
BRUNO'S, INC. AND SUBSIDIARIES
1. Purpose of Plan
The 1996 Stock Purchase and Option Plan for Key Employees of Bruno's, Inc.
and Subsidiaries (the "Plan") is designed:
(a) to promote the long term financial interests and growth of Bruno's,
Inc. (the "Corporation") and its subsidiaries by attracting and retaining
management personnel with the training, experience and ability to enable them
to make a substantial contribution to the success of the Corporation's
business;
(b) to motivate management personnel by means of growth-related
incentives to achieve long range goals; and
(c) to further the alignment of interests of participants with those of
the stockholders of the Corporation through opportunities for increased stock,
or stock-based, ownership in the Corporation.
2. Definitions
As used in the Plan, the following words shall have the following
meanings:
(a) "Grant" means an award made to a Participant pursuant to the Plan and
described in Paragraph 5, including, without limitation, an award of an
Incentive Stock Option, Stock Option, Stock Appreciation Right, Dividend
Equivalent Right, Restricted Stock, Purchase Stock, Performance Units,
Performance Shares or Other Stock Based Grant or any combination of the
foregoing.
(b) "Grant Agreement" means an agreement between the Corporation and a
Participant that sets forth the terms, conditions and limitations applicable to
a Grant.
(c) "Board of Directors" means the Board of Directors of the Corporation.
(d) "Committee" means the Compensation Committee of the Board of
Directors.
(e) "Common Stock" or "Share" means common stock of the Corporation which
may be authorized but unissued, or issued and reacquired.
(f) "Employee" means a person, including an officer, in the regular full-
time employment of the Corporation or one of its Subsidiaries who, in the
opinion of the Committee, is, or is expected to be, primarily responsible for
<PAGE>
the management, growth or protection of some part or all of the business of the
Corporation.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(h) "Fair Market Value" means such value of a Share as reported for stock
exchange transactions and/or determined in accordance with any applicable
resolutions or regulations of the Committee in effect at the relevant time.
(i) "Participant" means an Employee, or other person having a unique
relationship with the Corporation or one of its Subsidiaries, to whom one or
more Grants have been made and such Grants have not all been forfeited or
terminated under the Plan; provided, however, a non-employee director of the
Corporation or one of its Subsidiaries may not be a Participant.
(j) "Stock-Based Grants" means the collective reference to the grant
of Stock Appreciation Rights, Dividend Equivalent Rights, Restricted Stocks,
Performance Units, Performance Shares and Other Stock Based Grants.
(k) "Stock Options" means the collective reference to "Incentive Stock
Options" and "Other Stock Options".
(l) "Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Corporation if each of the corporations, or
group of commonly controlled corporations, other than the last corporation
in the unbroken chain then owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
3. Administration of Plan
(a) The Plan shall be administered by the Committee. None of the members
of the Committee shall be eligible to be selected for Grants under the Plan, or
have been so eligible for selection within one year prior thereto; provided,
however, that the members of the Committee shall qualify to administer the Plan
for purposes of Rule 16b-3 (and any other applicable rule) promulgated under
Section 16(b) of the Exchange Act to the extent that the Corporation is subject
to such rule. The Committee may adopt its own rules of procedure, and action
of a majority of the members of the Committee taken at a meeting, or action
taken without a meeting by unanimous written consent, shall constitute action
by the Committee. The Committee shall have the power and authority to
administer, construe and interpret the Plan, to make rules for carrying it out
and to make changes in such rules. Any such interpretations, rules, and
administration shall be consistent with the basic purposes of the Plan.
(b) The Committee may delegate to the Chief Executive Officer and to
other senior officers of the Corporation its duties under the Plan subject to
such conditions and limitations as the Committee shall prescribe except that
only the Committee may designate and make Grants to Participants who are
subject to Section 16 of the Exchange Act.
(c) The Committee may employ attorneys, consultants, accountants,
appraisers, brokers or other persons. The Committee, the Corporation, and the
officers and directors of the Corporation shall be entitled to rely upon the
advice, opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee in good faith shall be
final and binding upon all Participants, the Corporation and all other<PAGE>
interested persons. No member of the Committee shall be personally liable for
any action, determination or interpretation made in good faith with respect to
the Plan or the Grants, and all members of the Committee shall be fully
protected by the Corporation with respect to any such action, determination or
interpretation.
4. Eligibility
The Committee may from time to time make Grants under the Plan to such
Employees, or other persons having a unique relationship with Corporation or
any of its Subsidiaries, and in such form and having such terms, conditions and
limitations as the Committee may determine. No Grants may be made under this
Plan to non-employee directors of Corporation or any of its Subsidiaries.
Grants may be granted singly, in combination or in tandem. The terms,
conditions and limitations of each Grant under the Plan shall be set forth in a
Grant Agreement, in a form approved by the Committee, consistent, however, with
the terms of the Plan; provided, however, such Grant Agreement shall contain
provisions dealing with the treatment of Grants in the event of the
termination, death or disability of a Participant, and may also include
provisions concerning the treatment of Grants in the event of a change of
control of Corporation.
5. Grants
From time to time, the Committee will determine the forms and amounts of
Grants for Participants. Such Grants may take the following forms in the
Committee's sole discretion:
(a) Incentive Stock Options - These are stock options within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended ("Code"), to
purchase Common Stock. In addition to other restrictions contained in the
Plan, an option granted under this Paragraph 5(a), (i) may not be exercised
more than 10 years after the date it is granted, (ii) may not have an option
price less than the Fair Market Value of Common Stock on the date the option is
granted, (iii) must otherwise comply with Code Section 422, and (iv) must be
designated as an "Incentive Stock Option" by the Committee. The maximum
aggregate Fair Market Value of Common Stock (determined at the time of each
Grant) with respect to which any Participant may first exercise Incentive Stock
Options under this Plan and any Incentive Stock Options granted to the
Participant for such year under any plans of the Corporation or any Subsidiary
in any calendar year is $100,000. Payment of the option price shall be made in
cash or in shares of Common Stock, or a combination thereof, in accordance with
the terms of the Plan, the Grant Agreement, and of any applicable guidelines of
the Committee in effect at the time.
(b) Other Stock Options - These are options to purchase Common Stock
which are not designated by the Committee as "Incentive Stock Options". At the
time of the Grant the Committee shall determine, and shall include in
the Grant Agreement or other Plan rules, the option exercise period, the option
price, and such other conditions or restrictions on the grant or exercise of
the option as the Committee deems appropriate, which may include the
requirement that the grant of options is predicated on the acquisition of
Purchase Shares under Paragraph 5(e) by the Optionee. In addition to other
restrictions contained in the Plan, an option granted under this Paragraph
5(b), (i) may not be exercised more than 10 years after the date it is granted
and (ii) may not have an option exercise price less than 50% of the Fair Market
Value of Common Stock on the date the option is granted. Payment of the option<PAGE>
price shall be made in cash or in shares of Common Stock, or a combination
thereof, in accordance with the terms of the Plan, the Grant Agreement and of
any applicable guidelines of the Committee in effect at the time.
(c) Stock Appreciation Rights - These are rights that on exercise entitle
the holder to receive the excess of (i) the Fair Market Value of a share of
Common Stock on the date of exercise over (ii) the Fair Market Value on the
date of Grant (the "base value") multiplied by (iii) the number of rights
exercised as determined by the Committee. Stock Appreciation Rights granted
under the Plan may, but need not be, granted in conjunction with an Option
under Paragraph 5(a) or 5(b). The Committee, in the Grant Agreement or by
other Plan rules, may impose such conditions or restrictions on the exercise of
Stock Appreciation Rights as it deems appropriate, and may terminate, amend, or
suspend such Stock Appreciation Rights at any time. No Stock Appreciation
Right granted under this Plan may be exercised less than 6 months or more than
10 years after the date it is granted except in the event of death or
disability of a Participant. To the extent that any Stock Appreciation Right
that shall have become exercisable, but shall not have been exercised or
cancelled or, by reason of any termination of employment, shall have become
non-exercisable, it shall be deemed to have been exercised automatically,
without any notice of exercise, on the last day on which it is exercisable,
provided that any conditions or limitations on its exercise are satisfied
(other than (i) notice of exercise and (ii) exercise or election to exercise
during the period prescribed) and the Stock Appreciation Right shall then have
value. Such exercise shall be deemed to specify that the holder elects to
receive cash and that such exercise of a Stock Appreciation Right shall be
effective as of the time of automatic exercise.
(d) Restricted Stock - Restricted Stock is Common Stock delivered to a
Participant with or without payment of consideration with restrictions or
conditions on the Participant's right to transfer or sell such stock; provided
that the price of any Restricted Stock delivered for consideration and not as
bonus stock may not be less than 50% of the Fair Market Value of Common Stock
on the date such Restricted Stock is granted or the price of such Restricted
Stock may be the par value. If a Participant irrevocably elects in writing in
the calendar year preceding a Grant of Restricted Stock, dividends paid on the
Restricted Stock granted may be paid in shares of Restricted Stock equal to the
cash dividend paid on Common Stock. The number of shares of Restricted Stock
and the restrictions or conditions on such shares shall be as the Committee
determines, in the Grant Agreement or by other Plan rules, and the certificate
for the Restricted Stock shall bear evidence of the restrictions or conditions.
No Restricted Stock may have a restriction period of less than 6 months, other
than in the case of death or disability.
(e) Purchase Stock - Purchase Stock refers to shares of Common Stock
offered to a Participant at such price as determined by the Committee, the
acquisition of which will make him eligible to receive under the Plan,
including, but not limited to, Other Stock Options; provided, however, that
the price of such Purchase Shares may not be less than 50% of the Fair Market
Value of the Common Stock on the date such shares of Purchase Stock are
offered.
(f) Dividend Equivalent Rights - These are rights to receive cash
payments from the Corporation at the same time and in the same amount as any
cash dividends paid on an equal number of shares of Common Stock to
shareholders of record during the period such rights are effective. The
Committee, in the Grant Agreement or by other Plan rules, may impose such<PAGE>
restrictions and conditions on the Dividend Equivalent Rights, including the
date such rights will terminate, as it deems appropriate, and may terminate,
amend, or suspend such Dividend Equivalent Rights at any time.
(g) Performance Units - These are rights to receive at a specified future
date payment in cash of an amount equal to all or a portion of the value of a
unit granted by the Committee. At the time of the Grant, in the Grant
Agreement or by other Plan rules, the Committee must determine the base value
of the unit, the performance factors applicable to the determination of the
ultimate payment value of the unit and the period over which the Corporation's
performance will be measured. These factors must include a minimum performance
standard for the Corporation below which no payment will be made and a maximum
performance level above which no increased payment will be made. The term over
which the Corporation's performance will be measured shall be not less than six
months.
(h) Performance Shares - These are rights to receive at a specified
future date payment in cash or Common Stock, as determined by the Committee,
of an amount equal to all or a portion of the average Fair Market Value for
all days that the Common Stock is traded during the last forty-five (45) days
of the specified period of performance of a specified number of shares of
Common Stock at the end of a specified period based on the Corporation's
performance during the period. At the time of the Grant, the Committee, in
the Grant Agreement or by Plan rules, will determine the factors which will
govern the portion of the rights so payable and the period over which the
Corporation's performance will be measured. The factors will be based on the
Corporation's performance and must include a minimum performance standard for
the Corporation below which no payment will be made and a maximum performance
level above which no increased payment will be made. The term over which the
Corporation's performance will be measured shall be not less than six months.
Performance Shares will be granted for no consideration.
(i) Other Stock-Based Grants - The Committee may make other Grants under
the Plan pursuant to which shares of Common Stock (which may, but need not, be
shares of Restricted Stock pursuant to Paragraph 5(d)) or other equity
securities of the Corporation, are or may in the future be acquired, or
Grants denominated in stock units, including ones valued using measures
other than market value. Other Stock-Based Grants may be granted with or
without consideration; provided, however, that the price of any such
Grant made for consideration that provides for the acquisition of shares
of Common Stock or other equity securities of the Corporation may not be less
than 50% of the Fair Market Value of the Common Stock or such other equity
securities on the date of grant of such Grant. Such Other Stock-Based Grants
may be made alone, in addition to or in tandem with any Grant of any type made
under the Plan and must be consistent with the purposes of the Plan.
6. Limitations and Conditions
(a) The number of Shares available for Grants under this Plan shall be
2,050,000 shares of the authorized Common Stock as of the effective date of the
Plan. The number of Shares subject to Grants under this Plan to any one
Participant shall not be more than 456,530 shares. Unless restricted by
applicable law, Shares related to Grants that are forfeited, terminated,
cancelled or expire unexercised, shall immediately become available for Grants.
(b) No Grants shall be made under the Plan beyond ten years after the
effective date of the Plan, but the terms of Grants made on or before the
expiration of the Plan may extend beyond such expiration. At the time a Grant
<PAGE>
is made or amended or the terms or conditions of a Grant are changed, the
Committee may provide for limitations or conditions on such Grant.
(c) Nothing contained herein shall affect the right of the Corporation to
terminate any Participant's employment at any time or for any reason.
(d) Deferrals of Grant payouts may be provided for, at the sole
discretion of the Committee, in the Grant Agreements.
(e) Except as otherwise prescribed by the Committee, the amounts of the
Grants for any employee of a Subsidiary, along with interest, dividend, and
other expenses accrued on deferred Grants shall be charged to the Participant's
employer during the period for which the Grant is made. If the Participant is
employed by more than one Subsidiary or by both the Corporation and a
Subsidiary during the period for which the Grant is made, the Participant's
Grant and related expenses will be allocated between the companies employing
the Participant in a manner prescribed by the Committee.
(f) Other than as specifically provided with regard to the death of a
Participant, no benefit under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or
charge, and any attempt to do so shall be void. No such benefit shall, prior
to receipt thereof by the Participant, be in any manner liable for or subject
to the debts, contracts, liabilities, engagements, or torts of the Participant.
(g) Participants shall not be, and shall not have any of the rights or
privileges of, stockholders of the Corporation in respect of any Shares
purchasable in connection with any Grant unless and until certificates
representing any such Shares have been issued by the Corporation to such
Participants.
(h) No election as to benefits or exercise of Stock Options, Stock
Appreciation Rights, or other rights may be made during a Participant's
lifetime by anyone other than the Participant except by a legal representative
appointed for or by the Participant.
(i) Absent express provisions to the contrary, any grant under this Plan
shall not be deemed compensation for purposes of computing benefits or
contributions under any retirement plan of the Corporation or its Subsidiaries
and shall not affect any benefits under any other benefit plan of any kind now
or subsequently in effect under which the availability or amount of benefits is
related to level of compensation. This Plan is not a "Retirement Plan" or
"Welfare Plan" under the Employee Retirement Income Security Act of 1974, as
amended.
(j) Unless the Committee determines otherwise, no benefit or promise
under the Plan shall be secured by any specific assets of the Corporation or
any of its Subsidiaries, nor shall any assets of the Corporation or any of its
Subsidiaries be designated as attributable or allocated to the satisfaction of
the Corporation's obligations under the Plan.
7. Transfers and Leaves of Absence
For purposes of the Plan, unless the Committee determines otherwise: (a) a
transfer of a Participant's employment without an intervening period of
separation among the Corporation and any Subsidiary shall not be deemed a
termination of employment, and (b) a Participant who is granted in writing a
<PAGE>
leave of absence shall be deemed to have remained in the employ of the
Corporation during such leave of absence.
8. Adjustments
In the event of any change in the outstanding Common Stock by reason of a
stock split, spin-off, stock dividend, stock combination or reclassification,
recapitalization or merger, change of control, or similar event, the Committee
may adjust appropriately the number of Shares subject to the Plan and available
for or covered by Grants and Share prices related to outstanding Grants and
make such other revisions to outstanding Grants as it deems are equitably
required.
9. Merger, Consolidation, Exchange,
Acquisition, Liquidation or Dissolution
In its absolute discretion, and on such terms and conditions as it deems
appropriate, coincident with or after the grant of any Stock Option or any
Stock-Based Grant, the Committee may provide that such Stock Option or Stock-
Based Grant cannot be exercised after the merger or consolidation of the
Corporation into another corporation, the exchange of all or substantially all
of the assets of the Corporation for the securities of another corporation, the
acquisition by another corporation of 80% or more of the Corporation's then
outstanding shares of voting stock or the recapitalization, reclassification,
liquidation or dissolution of the Corporation, and if the Committee so
provides, it may, in its absolute discretion and on such terms and conditions
as it deems appropriate, also provide, either by the terms of such Stock Option
or Stock-Based Grant or by a resolution adopted prior to the occurrence of such
merger, consolidation, exchange, acquisition, recapitalization,
reclassification, liquidation or dissolution, that, for some period of time
prior to such event, such Stock Option or Stock-Based Grant shall be
exercisable as to all shares subject thereto, notwithstanding anything to the
contrary herein (but subject to the provisions of Paragraph 6(b)) and that,
upon the occurrence of such event, such Stock Option or Stock-Based Grant shall
terminate and be of no further force or effect; provided, however, that the
Committee may also provide, in its absolute discretion, that even if the Stock
Option or Stock-Based Grant shall remain exercisable after any such event, from
and after such event, any such Stock Option or Stock-Based Grant shall be
exercisable only for the kind and amount of securities and/or other property,
or the cash equivalent thereof, receivable as a result of such event by the
holder of a number of shares of stock for which such Stock Option or Stock-
Based Grant could have been exercised immediately prior to such event.
10. Amendment and Termination
The Committee shall have the authority to make such amendments to any
terms and conditions applicable to outstanding Grants as are consistent with
this Plan provided that, except for adjustments under Paragraph 8 or 9 hereof,
no such action shall modify such Grant in a manner adverse to the Participant
without the Participant's consent except as such modification is provided for
or contemplated in the terms of the Grant.
The Board of Directors may amend, suspend or terminate the Plan except
that no such action, other than an action under Paragraph 8 or 9 hereof, may be
taken which would, without shareholder approval, increase the aggregate number
of Shares available for Grants under the Plan, decrease the price of
<PAGE>
outstanding Options or Stock Appreciation Rights, change the requirements
relating to the Committee or extend the term of the Plan.
11. Foreign Options and Rights
The Committee may make Grants to Employees who are subject to the
laws of nations other than the United States, which Grants may have terms and
conditions that differ from the terms thereof as provided elsewhere in the Plan
for the purpose of complying with foreign laws.
12. Withholding Taxes
The Corporation shall have the right to deduct from any cash payment made
under the Plan any federal, state or local income or other taxes required by
law to be withheld with respect to such payment. It shall be a condition to
the obligation of the Corporation to deliver shares upon the exercise of an
Option or Stock Appreciation Right, upon payment of Performance units or
shares, upon delivery of Restricted Stock or upon exercise, settlement or
payment of any Other Stock-Based Grant that the Participant pay to the
Corporation such amount as may be requested by the Corporation for the purpose
of satisfying any liability for such withholding taxes. Any Grant Agreement
may provide that the Participant may elect, in accordance with any conditions
set forth in such Grant Agreement, to pay a portion or all of such withholding
taxes in shares of Common Stock.
13. Effective Date and Termination Dates
The Plan shall be effective on and as of the date of its approval by the
stockholders of the Corporation and shall terminate ten years later, subject to
earlier termination by the Board of Directors pursuant to Paragraph 10.
Exhibit 4.4
-----------
MANAGEMENT STOCKHOLDER'S AGREEMENT
----------------------------------
This Management Stockholder's Agreement (this "Agreement") is entered
into as of ___________ ____, 199__ between BRUNO'S, INC., an Alabama
corporation (the "Company"), and __________________ (the "Purchaser") (the
Company and the Purchaser being hereinafter collectively referred to as the
"Parties").
RECITALS
--------
On August 18, 1995, Crimson Acquisition Corp., an Alabama corporation
("Crimson"), merged with and into the Company (the "Merger"). In connection
with the Merger, the Company has sold and proposes to sell shares of its Common
Stock, par value $.01 per share (the "Common Stock"), to key employees of the
Company and certain other investors at a price of $12 per share of Common
Stock.
This Agreement is one of several other agreements ("Other Purchasers'
Agreements") which have been, or which in the future will be, entered into
between the Company and other individuals who are or will be key employees of
the Company or one of its subsidiaries (collectively, the "Other Purchasers").
In addition, the Company has also entered into, and may in the future enter
into, agreements (the "Investors' Agreements") with other purchasers
(collectively, the "Investors") pursuant to which the Investors purchased or
will purchase shares of Common Stock.
The Company has agreed to sell _______________ shares of Common Stock
to Purchaser so that Purchaser shall receive, in the aggregate, _______________
shares of Common Stock (the "Purchase Stock"). In addition, the Company will
grant to Purchaser an option or options to purchase Common Stock ("Options") at
an exercise price of $12 per share of Common Stock pursuant to the terms of the
1996 Stock Purchase and Option Plan for Key Employees of Bruno's, Inc. and
Subsidiaries (the "Option Plan") and the "Non-Qualified Stock Option Agreement"
attached hereto as Exhibit A. The Options may be granted as Time Options or
Performance Options (each as defined in the Non-Qualified Stock Option
Agreement).
AGREEMENT
---------
To implement the foregoing and in consideration of the mutual
agreements contained herein, the Parties agree as follows:
1. Purchase of Stock; Issuance of Options.
--------------------------------------
(a) Subject to the terms and conditions hereinafter set forth, the
Purchaser hereby subscribes for and shall purchase, and the Company shall
<PAGE>
sell to the Purchaser, the Purchase Stock at a purchase price of $12 per
share on _____________ ____, 199__ (the "Purchase Date"). The Company
shall have no obligation to sell any Purchase Stock to any person who (i)
is a resident or citizen of a state or other jurisdiction in which the
sale of the Purchase Stock to him or her would constitute a violation of
the securities or "blue sky" laws of such jurisdiction or (ii) is not an
employee of the Company or any of its subsidiaries on the date hereof.
(b) The aggregate price for the Purchase Stock shall be $__________
(such amount hereinafter sometimes referred to as the "Purchase Price").
The Purchase Price shall be paid in the following manner: the Purchaser
shall deliver to the Company at least three business days prior to the
Purchase Date cash or a certified bank check or checks payable to the
order of the Company in the aggregate amount of the Purchase Price. On
the Purchase Date, in consideration of receipt of the Purchase Price, the
Company will deliver to the Purchaser a certificate, registered in the
Purchaser's name, for the Purchase Stock, which shall be subject to the
terms and conditions hereinafter set forth.
(c) Subject to the terms and conditions hereinafter set forth and
upon and as of the Purchase Date, the Company shall issue to the Purchaser
the Options and the Parties shall execute and deliver to each other copies
of the Non-Qualified Stock Option Agreement concurrently with the issuance
of the Options.
2. Purchaser's Representations, Warranties and Agreements.
------------------------------------------------------
(a) The Purchaser agrees and acknowledges that he will not, directly
or indirectly, offer, transfer, sell, assign, pledge, hypothecate or otherwise
dispose of (any such act being herein referred to herein as a "transfer") any
shares of the Purchase Stock and, at the time of exercise, the Common Stock
issuable upon exercise of the Options (collectively, the "Stock") unless such
transfer complies with Section 3 of this Agreement. Furthermore, if the
Purchaser is an "affiliate" (as defined under Rule 405 of the rules and
regulations promulgated under the Act and as interpreted by the Board of
Directors of the Company) of the Company (an "Affiliate"), the Purchaser agrees
and acknowledges that he will not transfer any shares of the Stock
unless (i) the transfer is pursuant to an effective registration statement
under the Securities Act of 1933, as amended, and the rules and regulations in
effect thereunder (the "Act"), and in compliance with applicable provisions of
state securities laws or (ii) (A) counsel for the Purchaser (which counsel
shall be reasonably acceptable to the Company) shall have furnished the Company
with an opinion, satisfactory in form and substance to the Company, that no
such registration is required because of the availability of an exemption from
registration under the Act and (B) if the Purchaser is a citizen or resident
of any country other than the United States, or the Purchaser desires to effect
any transfer in any such country, counsel for the Purchaser (which counsel
shall be reasonably satisfactory to the Company) shall have furnished the
Company with an opinion or other advice reasonably satisfactory in form and
substance to the Company to the effect that such transfer will comply with the
securities laws of such jurisdiction. Notwithstanding the foregoing, the
Company acknowledges and agrees that any of the following transfers are deemed
to be in compliance with the Act and this Agreement and no opinion of counsel
is required in connection therewith: (x) a transfer made pursuant to Section 4,
5 or 6 hereof, (y) a transfer upon the death of the Purchaser to his executors,
administrators, testamentary trustees, legatees or beneficiaries (the
"Purchaser's Estate") or a transfer to the executors, administrators,
<PAGE>
testamentary trustees, legatees or beneficiaries of a person who has become a
holder of Stock in accordance with the terms of this Agreement, provided that
it is expressly understood that any such transferee shall be bound by the
provisions of this Agreement and (z) a transfer made after the Purchase Date in
compliance with the federal securities laws to a trust or custodianship the
beneficiaries of which may include only the Purchaser, his spouse or his lineal
descendants (a "Purchaser's Trust") or a transfer made after the third
anniversary of the Purchase Date to such a trust by a person who has become a
holder of Stock in accordance with the terms of this Agreement, provided that
such transfer is made expressly subject to this Agreement and that the
transferee agrees in writing to be bound by the terms and conditions hereof.
(b) The certificate (or certificates) representing the Stock shall
bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED,
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS
SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION COMPLIES WITH THE PROVISIONS OF THE MANAGEMENT
STOCKHOLDER'S AGREEMENT DATED AS OF _________ ___, 199__ BETWEEN
BRUNO'S, INC. ("THE COMPANY") AND THE PURCHASER NAMED ON THE FACE
HEREOF (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY). EXCEPT AS OTHERWISE PROVIDED IN SUCH AGREEMENT, NO
TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE MADE
EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND IN COMPLIANCE
WITH APPLICABLE PROVISIONS OF STATE SECURITIES LAWS OR (B) IF (I) THE
COMPANY HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR
THE HOLDER THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF
SECTION 5 OF THE ACT OR THE RULES AND REGULATIONS IN EFFECT
THEREUNDER, AND IN COMPLIANCE WITH APPLICABLE PROVISIONS OF STATE
SECURITIES LAWS, AND (II) IF THE HOLDER IS A CITIZEN OR RESIDENT OF
ANY COUNTRY OTHER THAN THE UNITED STATES, OR THE HOLDER DESIRES TO
EFFECT ANY SUCH TRANSACTION IN ANY SUCH COUNTRY, THE COMPANY HAS BEEN
FURNISHED WITH A SATISFACTORY OPINION OR OTHER ADVICE OF COUNSEL FOR
THE HOLDER THAT SUCH TRANSACTION WILL NOT VIOLATE THE LAWS OF SUCH
COUNTRY."
(c) The Purchaser acknowledges that he has been advised that (i) the
Stock has been registered on Form S-8 under the Act, (ii) a restrictive legend
in the form heretofore set forth shall be placed on the certificates
representing the Stock and (iii) a notation shall be made in the appropriate
records of the Company indicating that the Stock is subject to restrictions on
transfer and appropriate stop transfer restrictions will be issued to the
Company's transfer agent with respect to the Stock. If the Purchaser is an
Affiliate, the Purchase also acknowledges that (1) the Stock must be held
indefinitely and the Purchaser must continue to bear the economic risk of the
investment in the Stock unless it is subsequently registered under the Act or
an exemption from such registration is available, (2) it is not anticipated
that there will be any market on an exchange or a quotation service for the
Stock, (3) when and if shares of the Stock may be disposed of without
registration in reliance on Rule 144 of the rules and regulations promulgated
under the Act, such disposition can be made only in limited amounts in
accordance with the terms and conditions of such Rule, (4) if the Rule 144
exemption is not available, public sale without registration will require
compliance with Regulation A or some other exemption under the Act.<PAGE>
(d) If any shares of the Stock are to be disposed of in accordance
with Rule 144 under the Act or otherwise, the Purchaser shall promptly notify
the Company of such intended disposition and shall deliver to the Company at or
prior to the time of such disposition such documentation as the Company may
reasonably request in connection with such sale and, in the case of a
disposition pursuant to Rule 144, shall deliver to the Company an executed copy
of any notice on Form 144 required to be filed with the Securities and Exchange
Commission (the "SEC").
(e) The Purchaser agrees that, if any shares of the capital stock of
the Company are offered to the public pursuant to an effective registration
statement under the Act (other than registration of securities issued under an
employee plan), the Purchaser will not effect any public sale or distribution
of any shares of the Stock not covered by such registration statement within 7
days prior to, or within 180 days after, the effective date of such
registration statement, unless otherwise agreed to in writing by the Company.
(f) The Purchaser represents and warrants that (i) he has received
and reviewed the document(s) comprising the Prospectus (the "Prospectus")
relating to the Purchase Stock and the documents referred to therein, certain
of which documents set forth the rights, preferences and restrictions relating
to the Stock and (ii) he has been given the opportunity to obtain any
additional information or documents and to ask questions and receive answers
about such documents, the Company and the business and prospects of the Company
which he deems necessary to evaluate the merits and risks related to his
investment in the Purchase Stock and to verify the information contained in the
Prospectus and the information received as indicated in this Section 2(f)(ii),
and he has relied solely on such information.
(g) The Purchaser further represents and warrants that (i) his
financial condition is such that he can afford to bear the economic risk of
holding the Purchase Stock for an indefinite period of time and has adequate
means for providing for his current needs and personal contingencies, (ii) he
can afford to suffer a complete loss of his investment in the Purchase Stock,
(iii) he understands and has taken cognizance of all risk factors
related to the purchase of the Purchase Stock, including those set forth in the
Prospectus referred to above, and (v) his knowledge and experience in financial
and business matters are such that he is capable of evaluating the merits and
risks of his purchase of the Purchase Stock as contemplated by this Agreement.
3. Restriction on Transfer.
-----------------------
Except for transfers permitted by clauses (x), (y) and (z) of Section
2(a) or a sale of shares of Stock pursuant to an effective registration
statement under the Act filed by the Company or pursuant to the Sale
Participation Agreement (as defined below), the Purchaser agrees that he will
not transfer any shares of the Stock at any time prior to the fifth anniversary
of the Purchase Date. No transfer of any such shares in violation hereof shall
be made or recorded on the books of the Company and any such transfer shall be
void and of no effect.
<PAGE>
4. Right of First Refusal.
----------------------
If at any time after the fifth anniversary of the Purchase Date and
prior to a Public Offering (as defined below), the Purchaser receives a bona
fide offer to purchase any or all of his shares of Stock (the "Offer") from a
third party (the "Offeror") which the Purchaser wishes to accept, the Purchaser
shall cause the Offer to be reduced to writing and shall notify the Company in
writing of his wish to accept the Offer. The Purchaser's notice shall contain
an irrevocable offer to sell such shares of Stock to the Company, (in the
manner set forth below) at a purchase price equal to the price contained in,
and on the same terms and conditions of, the Offer, and shall be accompanied by
a true copy of the Offer (which shall identify the Offeror). At any time
within 30 days after the date of the receipt by the Company of the Purchaser's
notice, the Company shall have the right and option to purchase, or to arrange
for a third party to purchase, all of the shares of Stock covered by the Offer
either (i) at the same price and on the same terms and conditions as the Offer
or (ii) if the Offer includes any consideration other than cash, then at the
sole option of the Company, at the equivalent all cash price, determined in
good faith by the Company's Board of Directors, by delivering a certified bank
check or checks in the appropriate amount (and any such non-cash consideration
to be paid) to the Purchaser at the principal office of the Company against
delivery of certificates or other instruments representing the shares of the
Purchase Stock so purchased, appropriately endorsed by the Purchaser. If at
the end of such 30 day period, the Company has not tendered the purchase price
for such shares in the manner set forth above, the Purchaser may during the
succeeding 30 day period sell not less than all of the shares of Stock covered
by the Offer to the Offeror at a price and on terms no less favorable to the
Purchaser than those contained in the Offer. Promptly after such sale, the
Purchaser shall notify the Company of the consummation thereof and shall
furnish such evidence of the completion and time of completion of such sale and
of the terms thereof as may reasonably be requested by the Company. If, at the
end of 30 days following the expiration of the 30 day period for the Company to
purchase the Stock, the Purchaser has not completed the sale of such shares of
the Stock as aforesaid, all the restrictions on sale, transfer or assignment
contained in this Agreement shall again be in effect with respect to such
shares of the Stock.
5. Purchaser's Resale of Stock and Options to the
Company Upon The Purchaser's Death or Disability.
------------------------------------------------
(a) Except as otherwise provided herein, if at any time prior to a
Public Offering (i) the Purchaser is still in the employ of the Company or any
subsidiary of the Company, or had retired from the Company and its subsidiaries
at age 62 or over (or such other age as may be approved by the Board of
Directors of the Company) after having been employed by the Company or any
subsidiary for at least three years after the Purchase Date, and (ii) the
Purchaser either dies or becomes permanently disabled, then the Purchaser, the
Purchaser's Estate or a Purchaser's Trust, as the case may be, shall have the
right, for six months following the date of death or permanent disability, to
(A) sell to the Company, and the Company shall be required to purchase, on one
occasion, all or any portion of the shares of Stock then held by the Purchaser,
the Purchaser's Trust and/or the Purchaser's Estate, as the case may be, at the
Section 5 Repurchase Price, as determined in accordance with Section 7, and (B)
require the Company to pay to the Purchaser or the Purchaser's Estate, as the
case may be, an additional amount equal to the Option Excess Price determined
<PAGE>
on the basis of a Section 5 Repurchase Price as provided in Section 8 with
respect to the termination of outstanding Options held by the Purchaser. The
Purchaser, the Purchaser's Estate and/or the Purchaser's Trust, as the case may
be, shall send written notice to the Company of its intention to sell shares of
Stock and to terminate such Options in exchange for the payment referred to in
the preceding sentence (the "Redemption Notice"). The completion of the
purchase shall take place at the principal office of the Company on the tenth
business day after the giving of the Redemption Notice. The Section 5
Repurchase Price and any payment with respect to the Options as described above
shall be paid by delivery to the Purchaser, the Purchaser's Estate or the
Purchaser's Trust, as the case may be, of a certified bank check or checks in
the appropriate amount payable to the order of the Purchaser, the Purchaser's
Estate or the Purchaser's Trust, as the case may be, against delivery of
certificates or other instruments representing the Purchase Stock so purchased
and appropriate documents cancelling the Options so terminated appropriately
endorsed or executed by the Purchaser, the Purchaser's Estate or the
Purchaser's Trust, or his or its duly authorized representative. For purposes
of this Agreement, Purchaser shall be deemed to have a "permanent disability"
when the majority of the Board of Directors of the Company shall, in good
faith, so determine.
(b) Notwithstanding anything in Section 5(a) to the contrary and
subject to Section 11, if there exists and is continuing a default or an event
of default on the part of the Company or any subsidiary of the Company under
any loan, guarantee or other agreement under which the Company or any
subsidiary of the Company has borrowed money or if the repurchase referred to
in Section 5(a) would result in a default or an event of default on the part
of the Company or any subsidiary of the Company under any such agreement or if
a repurchase would not be permitted under Section 10-2B-6.31 of the Alabama
Business Corporation Act (the "ABCA") or would otherwise violate the ABCA (or
if the Company reincorporates in another state, the business corporation law
of such state) (each such occurrence being an "Event"), the Company shall not
be obligated to repurchase any of the Purchase Stock or the Options from the
Purchaser, the Purchaser's Estate or the Purchaser's Trust, as the case may be,
until the first business day which is 10 calendar days after all of the
foregoing Events have ceased to exist (the "Repurchase Eligibility Date");
provided, however, that (i) the number of shares of Purchase Stock subject to
repurchase under this Section 5(b) shall be that number of shares of Purchase
Stock, and (ii) the number of Exercisable Option Shares (as defined in Section
8) for purposes of calculating the Option Excess Price payable under this
Section 5(b) shall be the number of Exercisable Option Shares, held by the
Purchaser, the Purchaser's Estate or a Purchaser's Trust, as the case may be,
at the time of delivery of a Redemption Notice in accordance with Section 5(a)
hereof; provided, further, that the Repurchase Calculation Date shall be
determined in accordance with Section 7 as of the Repurchase Eligibility Date
(unless the Section 5 Repurchase Price would be greater if the Repurchase
Calculation Date had been determined as if no Event had occurred in which case,
solely for purposes of this proviso, the Repurchase Calculation Date shall be
determined as if no Event had occurred). All Options exercisable as of the
date of a Redemption Notice shall continue to be exercisable until the
repurchase pursuant to such Redemption Notice.
(c) Notwithstanding any other provision of this Section 5 to the
contrary and subject to Section 11, the Purchaser, the Purchaser's Estate or
the Purchaser's Trust, as the case may be, shall have the right to withdraw any
Redemption Notice which has been pending for 60 or more days and which has
remained unsatisfied because of the provisions of Section 5(b).
<PAGE>
6. The Company's Option to Repurchase Stock
and Options of Purchaser.
----------------------------------------
(a) If, on or prior to the fifth anniversary of the Purchase Date,
(i) the Purchaser's active employment with the Company (and/or, if applicable,
its subsidiaries) is voluntarily or involuntarily terminated for any reason
whatsoever, with or without Cause, (ii) the beneficiaries of a Purchaser's
Trust shall include any person or entity other than the Purchaser, his spouse
or his lineal descendants, or (iii) the Purchaser shall effect a transfer of
any of the Stock other than as permitted in this Agreement (alternatively, a
"Call Event"), the Company shall have the right to purchase all, but not less
than all, of the shares of the Stock then held by the Purchaser or a
Purchaser's Trust at the Section 6 Repurchase Price determined in accordance
with Section 7 hereof; provided, however, that if the termination of employment
results from (A) the death or permanent disability of the Purchaser or (B) the
retirement of the Purchaser from the Company or any of its subsidiaries at age
62 or over (or such other age as may be approved by the Board of Directors of
the Company) after having been employed by the Company or its subsidiaries for
at least three years after the Purchase Date, the Company shall have the right
to purchase all, but not less than all, of the shares of the Purchase Stock
then held by the Purchaser or a Purchaser's Trust but the Repurchase Price
shall be the Section 5 Repurchase Price. The Company shall have a period of 75
days from the date of a Call Event in which to give notice in writing to the
Purchaser of the exercise of such election ("Call Notice"). In the event that
the Company exercises its right to repurchase shares of the Purchase Stock
pursuant to this Section 6, the Company shall also pay the Purchaser an amount
equal to the Option Excess Price determined on the basis of the Section 6
Repurchase Price or the Section 5 Repurchase Price, as the case may be, as
provided in Section 8, with respect to the termination of outstanding Options
held by the Purchaser.
(b) The completion of the purchases pursuant to the foregoing shall
take place at the principal office of the Company on the tenth business day
after the giving of notice of the exercise of the option to purchase. The
Section 5 Repurchase Price or the Section 6 Repurchase Price, as the case may
be, and any payment with respect to the Options as described above shall be
paid by delivery to the Purchaser of a certified bank check or checks in the
appropriate amount payable to the order of the Purchaser against delivery of
certificates or other instruments representing the Purchase Stock so purchased
and appropriate documents cancelling the Options so terminated, appropriately
endorsed or executed by the Purchaser, the Purchaser's Trust or his or its
authorized representative.
(c) Notwithstanding any other provision of this Section 6 to the
contrary and subject to Section 11, if there exists and is continuing any
Event, the Company shall delay the repurchase of any of the Purchase Stock or
the Options (pursuant to a Call Notice timely given in accordance with Section
6(a) hereof) from the Purchaser, the Purchaser's Estate, or the Purchaser's
Trust, as the case may be, until the Repurchase Eligibility Date; provided,
however, that (i) the number of shares of Purchase Stock subject to repurchase
under this Section 6(c) shall be that number of shares of Purchase Stock and
(ii) the number of Exercisable Option Shares for purposes of calculating the
Option Excess Price payable under this Section 6(c) shall be the number of
Exercisable Option Shares held by the Purchaser, the Purchaser's Estate or a
Purchaser's Trust, as the case may be, at the time of delivery of a Call Notice
in accordance with Section 6(a) hereof; provided, further, that the Repurchase
<PAGE>
Calculation Date shall be determined in accordance with Section 7 based on the
Repurchase Eligibility Date (unless the applicable Repurchase Price would be
greater if the Repurchase Calculation Date had been determined as if no Event
had occurred, in which case, solely for purposes of this proviso, the
Repurchase Calculation Date shall be determined as if no Event had occurred).
All Options exercisable as of the date of a Call Notice shall continue to be
exercisable until the repurchase pursuant to such Call Notice.
7. Determination of Repurchase Price.
---------------------------------
(a) The Section 5 Repurchase Price and the Section 6 Repurchase
Price are hereinafter collectively referred to as the "Repurchase Price." The
Repurchase Price shall be calculated on the basis of the unaudited financial
statements of the Company or the Market Price Per Share (as defined in Section
7(f)) as of the last day of the month preceding the later of (i) the month in
which the event giving rise to the repurchase occurs and (ii) the month in
which the Repurchase Eligibility Date occurs (hereinafter called the
"Repurchase Calculation Date"). The event giving rise to the repurchase shall
be the death, permanent disability, retirement or termination of employment, as
the case may be, of the Purchaser, not the giving of any notice required
pursuant to Section 5 or 6.
(b) Prior to a Public Offering (as hereinafter defined) the Section
5 Repurchase Price shall be a per share Repurchase Price equal to $12 plus the
amount, if any, by which the Book Value Per Share (as defined in Section 7(d))
as of the Repurchase Calculation Date exceeds $12. After a Public Offering,
the Section 5 Repurchase Price shall be a per share Repurchase Price equal to
$12 plus the amount, if any, by which the Market Price Per Share as of the
Repurchase Calculation Date exceeds $12.
(c) Prior to a Public Offering, the Section 6 Repurchase Price shall
be a per share Repurchase Price equal to the lesser of (i) the Book Value Per
Share or (ii) $12 plus (x) the Percentage (as defined below) multiplied by (y)
the amount, if any, by which the Book Value Per Share as of the Repurchase
Calculation Date exceeds $12. After a Public Offering, the Section 6
Repurchase Price shall be a per share Repurchase Price equal to the lesser of
(i) Market Price Per Share or (ii) $12 plus (a) the Percentage multiplied by
(b) the amount, if any, by which the Market Price Per Share as of the
Repurchase Calculation Date exceeds $12; provided, however, that in the event
of Purchaser's termination without Cause by the Company (and/or, if applicable,
its subsidiaries) or with Good Reason by the Purchaser, the Section 6
Repurchase Price shall be the Book Value Per Share or Market Price Per Share,
as the case may be. For purposes of this Agreement the following definitions
shall apply: "Cause" shall mean (i) the Purchaser's willful and continued
failure to perform Purchaser's duties with respect to the Company or its
subsidiaries which continues beyond ten days after a written demand for
substantial performance is delivered to Purchaser by the Company or (ii)
misconduct by Purchaser involving (x) dishonesty or breach of trust in
connection with Purchaser's employment or (y) conduct which would be a
reasonable basis for an indictment of Purchaser for a felony or for a
misdemeanor involving moral turpitude; and "Good Reason" shall mean (i) a
reduction in Purchaser's base salary or (ii) a substantial reduction in
Purchaser's duties and responsibilities other than as approved by the Chief
Executive Officer of the Company. Notwithstanding the immediately preceding
sentence, the definitions in any employment agreement in effect on the date
hereof between the Company and Purchaser of "Cause" and "Good Reason" shall
<PAGE>
supersede and replace the definitions of "Cause" and "Good Reason" in the
immediately preceding sentence and shall be deemed incorporated by reference in
this Agreement in their entirety.
The "Percentage" shall be determined as follows:
Repurchase Calculation Date Percentage
- --------------------------- ----------
Purchase Date through and including the first anniversary 0%
of the Purchase Date
After the first anniversary of the Purchase Date through 20%
and including the second anniversary of the Purchase
Date
After the second anniversary of the Purchase Date through 40%
and including the third anniversary of the Purchase
Date
After the third anniversary of the Purchase Date through 60%
and including the fourth anniversary of the Purchase
Date
After the fourth anniversary of the Purchase Date through 80%
and including the fifth anniversary of the Purchase
Date
After the fifth anniversary of the Purchase Date 100%
(d) For purposes of this Agreement, "Book Value Per Share" shall be
the quotient of (a) (i) $300 million plus (ii) the aggregate net income of
the Company from and after the date of the Merger (as decreased by any net
losses from and after the date of the Merger) plus (iii) the aggregate dollar
amount contributed to the Company after the date of the Merger as equity by the
shareholders of the Company (including consideration to be received upon
exercise of the Options and other stock equivalents) plus (iv) unusual charges
taken during the Company's transition period ended January 27, 1996 which,
net of taxes, total $88.251 million, (v) plus, to the extent reflected as
deductions to Book Value Per Share in clause (ii) above, or minus, to the
extent reflected as additions to Book Value Per Share in clause (ii) above,
unusual items recognized by the Company, if and to the extent determined in the
sole discretion of the Compensation Committee of the Board of Directors of the
Company, minus, (vi) the aggregate dollar amount of any dividends paid by the
Company after the date of the Merger divided by (b) the sum of the number of
shares of Common Stock then outstanding and the number of shares of Common
Stock issuable upon the exercise of all outstanding stock options and other
rights to acquire Common Stock and the conversion of all securities convertible
into shares of Common Stock. The calculations set forth in clauses (a)(ii),
(a)(iii) and (a)(vi) of the immediately preceding sentence shall be determined
in accordance with generally accepted accounting principles applied on a basis
consistent with any prior periods as reflected in the consolidated financial
statements of the Company.<PAGE>
(e) As used herein the term "Public Offering" shall mean the sale of
shares of Common Stock to the public subsequent to the date hereof pursuant to
a registration statement under the Act which has been declared effective by the
SEC (other than a registration statement on Form S-8 or any other similar form)
which results in an active trading market in the Common Stock if such a market
does not already exist. A "Qualified Public Offering" shall mean a Public
Offering pursuant to an effective registration statement relating to the sale
of shares of the Company Stock held by any and all of KKR Partners II, L.P. and
Crimson Associates, L.P., a Delaware limited partnership; provided, however,
that a "Qualified Public Offering" shall be deemed to have occurred if there
has been a Public Offering and there exists an active trading market in 40% or
more of the Common Stock.
(f) As used herein the term "Market Price Per Share" shall mean the
price per share equal to the average of the last sale price of the Common Stock
on the Repurchase Calculation Date on each exchange on which the Common Stock
may at the time be listed or, if there shall have been no sales on any of such
exchanges on the Repurchase Calculation Date, the average of the closing bid
and asked prices on each such exchange at the end of the Repurchase Calculation
Date or if there is no such bid and asked price on the Repurchase Calculation
Date on the next preceding date when such bid and asked price occurred or, if
the Common Stock shall not be so listed, the average of the closing sales
prices as reported by NASDAQ at the end of the Repurchase Calculation Date in
the over-the-counter market. If the Common Stock is not so listed or reported
by NASDAQ, then the Market Price Per Share shall be the Book Value Per Share.
(g) In determining the Repurchase Price, appropriate adjustments
shall be made for any future issuances of rights to acquire and securities
convertible into Common Stock and any stock dividends, splits, combinations,
recapitalizations or any other adjustment in the number of outstanding shares
of Common Stock.
8. Stock Issued to Purchaser Upon Exercise of Stock
Options; Termination of Options.
------------------------------------------------
(a) The Company may from time to time grant to the Purchaser, in
addition to the Options, options under the Option Plan to purchase shares of
Common Stock at $12 per share or at a different option exercise price. The
term "Purchase Stock" as used in this Agreement shall include all shares of
Common Stock of the Company purchased by the Purchaser pursuant to this
Agreement and issued to the Purchaser by the Company upon exercise of the
Options and of any other stock options held by the Purchaser.
(b) All outstanding Options granted to the Purchaser under the
Option Plan or otherwise, whether or not then exercisable, will be
automatically terminated upon the payment by the Company to the Purchaser,
pursuant to the provisions of Sections 5 or 6 of this Agreement, of an amount
equal to the Option Excess Price. If the Option Excess Price is zero or a
negative number, all outstanding stock options granted to the Purchaser under
the Option Plan or otherwise, whether or not then exercisable, shall be
automatically terminated upon the repurchase of Stock as provided in Sections 5
or 6. The Option Excess Price is the excess, if any, of the Section 5
Repurchase Price or the Section 6 Repurchase Price, depending on which
Repurchase Price is being used to repurchase the remainder of the Stock, over
the Option Price (as defined in the Option Plan) multiplied by the number of<PAGE>
Exercisable Option Shares. For purposes hereof, "Exercisable Option Shares"
shall mean the shares of Common Stock which, at the time of determination of
the Option Excess Price, could be purchased by the Purchaser upon exercise of
his outstanding options.
9. The Company's Representations and Warranties.
--------------------------------------------
(a) The Company represents and warrants to the Purchaser that (i)
this Agreement has been duly authorized, executed and delivered by the Company
and (ii) the Purchase Stock, when issued and delivered in accordance with the
terms hereof, will be duly and validly issued, fully paid and nonassessable.
(b) If the Company shall have engaged in a Public Offering, the
Company will file the reports required to be filed by it under the Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder, to
the extent required from time to time to enable the Purchaser to sell shares of
Stock without registration under the Act within the limitations of the
exemptions provided by (A) Rule 144 under the Act, as such Rule may be amended
from time to time, or (B) any similar rule or regulation hereafter adopted by
the SEC. Notwithstanding anything contained in this Section 10(b), the Company
may deregister under Section 12 of the Exchange Act if it is then permitted to
do so pursuant to the Exchange Act and the rules and regulations thereunder.
Nothing in this Section 9(b) shall be deemed to limit in any manner the
restrictions on sales of Stock contained in this Agreement.
10. "Piggyback" Registration Rights.
-------------------------------
(a) If the Purchaser is an Affiliate of the Company, effective upon
the purchase of Common Stock pursuant to this Agreement, until the later of
(i) the first occurrence of a Qualified Public Offering (as defined in
Section 7(e) above) or (ii) the fifth anniversary of the Purchase Date, the
Purchaser hereby agrees to be bound by all of the terms, conditions and
obligations of the Registration Rights Agreement dated as of August 18, 1995,
among the Company (as successor by Merger to Crimson Acquisition Corp.) and
certain of the Investors (the "Registration Rights Agreement") and, in the case
of a Qualified Public Offering and subject to the limitations set forth in this
Section 10, shall have all of the rights and privileges of the Registration
Rights Agreement, in each case as if the Purchaser were an original party
(other than the Company) thereto; provided, however, that the Purchaser shall
not have any rights to request registration under Section 3 of the Registration
Rights Agreement; and provided further, that the Purchaser shall not be bound
by any amendments to the Registration Rights Agreement unless Purchaser
consents thereto. Notwithstanding anything to the contrary contained in the
Registration Rights Agreement, the Purchaser's rights and obligations under
the Registration Rights Agreement shall be subject to the limitations and
additional obligations set forth in this Section 10. All shares of Stock
purchased by the Purchaser pursuant to this Agreement and held by the
Purchaser, the Purchaser's Trust or the Purchaser's Estate, including shares
purchased upon the exercise of Options, shall be deemed to be Registrable
Securities as defined in the Registration Rights Agreement.
(b) The Company will promptly notify the Purchaser in writing (a
"Notice") of any proposed registration (a "Proposed Registration") in
connection with a Qualified Public Offering. If within 15 days of the receipt
by the Purchaser of such Notice, the Company receives from the Purchaser, the<PAGE>
Purchaser's Trust or the Purchaser's Estate a written request (a "Request") to
register shares of Stock held by the Purchaser, the Purchaser's Estate or the
Purchaser's Trust (which Request will be irrevocable unless otherwise mutually
agreed to in writing by the Purchaser and the Company), shares of Stock will be
so registered as provided in this Section 10; provided, however, that for each
such registration statement only one Request, which shall be executed by the
Purchaser, the Purchaser's Trust or the Purchaser's Estate, as the case may be,
may be submitted for all Registrable Securities held by the Purchaser, the
Purchaser's Estate and the Purchaser's Trust.
(c) The maximum number of shares of Stock which will be registered
pursuant to a Request will be the lowest of (i) the number of shares of Stock
then held by the Purchaser (which for purposes of this subparagraph (c) shall
include shares held by the Purchaser's Estate or a Purchaser's Trust),
including all shares of Stock which the Purchaser is then entitled to acquire
under an unexercised Option to the extent then exercisable or (ii) the maximum
number of shares of Stock which the Company can register in the Proposed
Registration without adverse effect on the offering in the view of the managing
underwriters (reduced pro rata with all Other Purchasers) as more fully
described in subsection (d) of this Section 10 or (iii) the maximum number of
shares which the Purchaser (pro rata based upon the aggregate number of shares
of Common Stock the Purchaser and all Other Purchasers have requested be
registered) and all Other Purchasers are permitted to register under the
Registration Rights Agreement.
(d) If a Proposed Registration involves an underwritten offering and
the managing underwriter advises the Company in writing that, in its opinion,
the number of shares of Stock requested to be included in the Proposed
Registration exceeds the number which can be sold in such offering, so as to be
likely to have an adverse effect on the price, timing or distribution of the
shares of Stock offered in such Qualified Public Offering as contemplated by
the Company, then the Company will include in the Proposed Registration (i)
first, 100% of the shares of Stock the Company proposes to sell and (ii)
second, to the extent of the number of shares of Stock requested to be included
in such registration which, in the opinion of such managing underwriter, can be
sold without having the adverse effect referred to above, the number of shares
of Stock which the "Holders" (as defined in the Registration Rights Agreement),
including, without limitation, the Purchaser and Other Purchasers have
requested to be included in the Proposed Registration, such amount to be
allocated pro rata among all requesting Holders on the basis of the relative
number of shares of Stock then held by each such Holder (provided that any
shares thereby allocated to any such Holder that exceed such Holder's request
will be reallocated among the remaining requesting Holders in like manner).
(e) Upon delivering a Request the Purchaser will, if requested by
the Company, execute and deliver a custody agreement and power of attorney in
form and substance satisfactory to the Company with respect to the shares of
Stock to be registered pursuant to this Section 10 (a "Custody Agreement and
Power of Attorney"). The Custody Agreement and Power of Attorney will provide,
among other things, that the Purchaser will deliver to and deposit in custody
with the custodian and attorney-in-fact named therein a certificate or
certificates representing such shares of Stock (duly endorsed in blank by the
registered owner or owners thereof or accompanied by duly executed stock powers
in blank) and irrevocably appoint said custodian and attorney-in-fact as the
Purchaser's agent and attorney-in-fact with full power and authority to act
under the Custody Agreement and Power of Attorney on the Purchaser's behalf
with respect to the matters specified therein.<PAGE>
(f) The Purchaser agrees that he will execute such other agreements
as the Company may reasonably request to further evidence the provisions of
this Section 10.
(g) Notwithstanding anything to the contrary in the foregoing, the
Purchaser shall have no registration rights under this Section 10 unless he
is an Affiliate of the Company.
11. Pro Rata Repurchases.
--------------------
Notwithstanding anything to the contrary contained in Sections 5, 6
or 7, if at any time consummation of all purchases and payments to be made by
the Company pursuant to this Agreement and the Other Purchasers' Agreements
would result in an Event, then the Company shall make purchases from, and
payments to, the Purchaser and Other Purchasers pro rata (on the basis of the
proportion of the number of shares of Stock and the number of Options each such
Purchaser and all Other Purchasers have elected or are required to sell to the
Company) for the maximum number of shares of Stock and shall pay the Option
Excess Price for the maximum number of Options permitted without resulting in
an Event (the "Maximum Repurchase Amount"). The provisions of Section 5(b) and
6(c) shall apply in their entirety to payments and repurchases with respect to
Options and shares of Stock which may not be made due to the limits imposed by
the Maximum Repurchase Amount under this Section 11. Until all of such Stock
and Options are purchased and paid for by the Company, the Purchaser and the
Other Purchasers whose Stock and Options are not purchased in accordance with
this Section 11 shall have priority, on a pro rata basis, over other purchases
of Common Stock and Options by the Company pursuant to this Agreement and Other
Purchasers' Agreements.
12. Rights to Negotiate Repurchase Price.
------------------------------------
Nothing in this Agreement shall be deemed to restrict or prohibit the
Company from purchasing shares of Stock or Options from the Purchaser, at any
time, upon such terms and conditions, and for such price, as may be mutually
agreed upon between the Parties, whether or not at the time of such purchase
circumstances exist which specifically grant the Company the right to purchase,
or the Purchaser the right to sell, shares of Stock or the Company has the
right to pay, or the Purchaser has the right to receive, the Option Excess
Price under the terms of this Agreement.
13. Covenant Regarding 83(b) Election.
---------------------------------
Except as the Company may otherwise agree in writing, the Purchaser
hereby covenants and agrees that he will make an election provided pursuant to
Treasury Regulation 1.83-2 with respect to the Stock, including without
limitation, the Stock to be acquired pursuant to Section 1 and the Stock to be
acquired upon each exercise of the Purchaser's Options; and Purchaser further
covenants and agrees that he will furnish the Company with copies of the forms
of election the Purchaser files within 30 days after the date hereof, and
within 30 days after each exercise of Purchaser's Non-Qualified Options and
with evidence that each such election has been filed in a timely manner.
<PAGE>
14. Notice of Change of Beneficiary.
-------------------------------
Immediately prior to any transfer of Stock to a Purchaser's Trust,
the Purchaser shall provide the Company with
a copy of the instruments creating the Purchaser's Trust and with the identity
of the beneficiaries of the Purchaser's Trust. The Purchaser shall notify the
Company immediately prior to any change in the identity of any beneficiary of
the Purchaser's Trust.
15. Expiration of Certain Provisions.
--------------------------------
The provisions contained in Sections 4, 5 and 6 of this Agreement and
the portion of any other provision of this Agreement which incorporates the
provisions of Sections 4, 5 and 6, shall terminate and be of no further force
or effect with respect to any shares of Stock sold by the Purchaser (i)
pursuant to an effective registration statement filed by the Company pursuant
to Section 10 hereof or (ii) pursuant to the terms of the Sale Participation
Agreement of even date herewith, among the Purchaser, KKR Partners II, L.P. and
Crimson Associates, L.P.
The provisions contained in Sections 2(e), 3, 4, 5, 6 and 13 of this
Agreement, and the portion of any other provisions of this Agreement which
incorporate the provisions of such Sections, shall terminate and be of no
further force or effect upon the consummation of a merger, reorganization,
business combination or liquidation of the Company, or a sale of Common Stock
owned by the Investors, but only if such merger, reorganization, business
combination, liquidation or sale of Common Stock results in KKR Associates, a
New York limited partnership, or any affiliate thereof, no longer having the
power (i) to elect a majority of the Board of Directors of the Company or such
other corporation which succeeds to the Company's rights and obligations
pursuant to such merger, reorganization, business combination, liquidation or
stock sale, or (ii) if the resulting entity of such merger, reorganization,
business combination, liquidation or stock sale is not a corporation, to select
the general partner(s) or other persons or entities controlling the operations
and business of the resulting entity.
16. Recapitalizations, etc.
----------------------
The provisions of this Agreement shall apply, to the full extent set
forth herein with respect to the Stock or the Options, to any and all shares of
capital stock of the Company or any capital stock, partnership units or any
other security evidencing ownership interests in any successor or assign of the
Company (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or substitution of the Stock or
the Options, by reason of any stock dividend, split, reverse split,
combination, recapitalization, liquidation, reclassification, merger,
consolidation or otherwise.
17. Purchaser's Employment by the Company.
-------------------------------------
Nothing contained in this Agreement or in any other agreement entered
into by the Company and the Purchaser contemporaneously with the execution of
this Agreement (i) obligates the Company or any subsidiary of the Company to<PAGE>
employ the Purchaser in any capacity whatsoever or (ii) prohibits or restricts
the Company (or any such subsidiary) from terminating the employment, if any,
of the Purchaser at any time or for any reason whatsoever, with or without
Cause, and the Purchaser hereby acknowledges and agrees that neither the
Company nor any other person has made any representations or promises
whatsoever to the Purchaser concerning the Purchaser's employment or continued
employment by the Company or any subsidiary of the Company.
18. State Securities Laws.
---------------------
The Company hereby agrees to use its best efforts to comply with all
state securities or "blue sky" laws which might be applicable to the sale of
the Stock and the issuance of the Options to the Purchaser.
19. Binding Effect.
--------------
The provisions of this Agreement shall be binding upon and accrue to
the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns. In the case of a transferee permitted
under Section 2(a) hereof, such transferee shall be deemed the Purchaser
hereunder; provided, however, that no transferee (including without limitation,
transferees referred to in Section 2(a) hereof) shall derive any rights under
this Agreement unless and until such transferee has delivered to the Company a
valid undertaking and becomes bound by the terms of this Agreement.
20. Amendment.
---------
This Agreement may be amended only by a written instrument signed by
the Parties hereto.
21. Closing.
-------
Except as otherwise provided herein, the closing of each purchase and
sale of shares of Stock and the payment of the Option Excess Price, if any,
pursuant to this Agreement shall take place at the principal office of the
Company on the tenth business day following delivery of the notice by either
Party to the other of its exercise of the right to purchase or sell such Stock
hereunder or to cause the payment of the Option Excess Price, if any.
22. Applicable Law.
--------------
The laws of the state of Alabama (or if the Company reincorporates in
another state, of that state) shall govern the interpretation, validity and
performance of the terms of this Agreement, regardless of the law that might be
applied under principles of conflicts of law. Any suit, action or proceeding
against the Purchaser, with respect to this Agreement, or any judgment entered
by any court in respect of any thereof, may be brought in any court of
competent jurisdiction in the State of Alabama (or if the Company
reincorporates in another state, in that state) or New York, as the Company may
elect in its sole discretion, and the Purchaser hereby submits to the non-
exclusive jurisdiction of such courts for the purpose of any such suit, action,
proceeding or judgment. By the execution and delivery of this Agreement, the<PAGE>
Purchaser appoints The Corporation Trust Company, at its office in New York,
New York or Montgomery, Alabama (or if the Company reincorporates in another
state, an office in that state), as the case may be, as his agent upon which
process may be served in any such suit, action or proceeding. Service of
process upon such agent, together with notice of such service given to the
Purchaser in the manner provided in Section 25 hereof, shall be deemed in every
respect effective service of process upon him in any suit, action or
proceeding. Nothing herein shall in any way be deemed to limit the ability of
the Company to serve any such writs, process or summonses in any other manner
permitted by applicable law or to obtain jurisdiction over the Purchaser, in
such other jurisdictions and in such manner, as may be permitted by applicable
law. The Purchaser hereby irrevocably waives any objections which he may now
or hereafter have to the laying of the venue of any suit, action or proceeding
arising out of or relating to this Agreement brought in any court of competent
jurisdiction in the State of Alabama (or if the Company reincorporates in
another state, in that state) or New York, and hereby further irrevocably
waives any claim that any such suit, action or proceeding brought in any such
court has been brought in any inconvenient forum. No suit, action or
proceeding against the Company with respect to this Agreement may be brought in
any court, domestic or foreign, or before any similar domestic or foreign
authority other than in a court of competent jurisdiction in the State of
Alabama (or if the Company reincorporates in another state, in that state) or
New York, and the Purchaser hereby irrevocably waives any right which he may
otherwise have had to bring such an action in any other court, domestic or
foreign, or before any similar domestic or foreign authority. The Company
hereby submits to the jurisdiction of such courts for the purpose of any such
suit, action or proceeding.
23. Assignability of Certain Rights by the Company.
----------------------------------------------
The Company shall have the right to assign any or all of its rights
or obligations to purchase shares of Stock pursuant to Sections 4, 5 and 6
hereof; provided, however, that the Company shall remain obligated to perform
its obligations notwithstanding such assignment in the event that such assignee
fails to perform the obligations so assigned to it.
24. Miscellaneous.
-------------
In this Agreement (i) all references to "dollars" or "$" are to
United States dollars and (ii) the word "or" is not exclusive. If any
provision of this Agreement shall be declared illegal, void or unenforceable by
any court of competent jurisdiction, the other provisions shall not be
affected, but shall remain in full force and effect.
25. Notices.
-------
All notices and other communications provided for herein shall be in
writing and shall be deemed to have been duly given if delivered by hand
(whether by overnight courier or otherwise) or sent by registered or certified
mail, return receipt requested, postage prepaid, to the Party to whom it is
directed:
<PAGE>
(a) If to the Company, to it at the following address:
c/o Kohlberg Kravis Roberts & Co.
2800 Sand Hill Road
Suite 200
Menlo Park, California 94025
Attn: James H. Greene, Jr.
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3909
Attn: David J. Sorkin, Esq.
(b) If to the Purchaser, to him at the address set forth below under
his signature;
or at such other address as either party shall have specified by
notice in writing to the other.
26. Covenant Not to Compete; Confidential Information.
-------------------------------------------------
(a) In consideration of the Company entering into this Agreement
with the Purchaser, the Purchaser hereby agrees effective as of the Purchase
Date, for so long as the Purchaser is employed by the Company or one of its
subsidiaries and for a period of one year thereafter (the "Noncompete Period"),
the Purchaser shall not, directly or indirectly, engage in the production, sale
or distribution of any product produced, sold or distributed by the Company or
its subsidiaries on the date hereof or during the Noncompete Period anywhere in
the world in which the Company or its subsidiaries is doing business other than
through the Purchaser's employment with the Company or any of its subsidiaries.
At the Company's option, the Noncompete Period may be extended for an
additional one year period if (i) within nine months of the termination of the
Purchaser's employment, the Company gives the Purchaser notice of such
extension and (ii) beginning with the first anniversary of such termination,
the Company pays the Purchaser an amount equal to the Purchaser's base salary
on the date of the termination of his employment. Such amount shall be paid in
installments in a manner consistent with the then current salary payment
policies of the Company. For purposes of this Agreement, the phrase "directly
or indirectly engage in" shall include any direct or indirect ownership or
profit participation interest in such enterprise, whether as an owner,
stockholder, partner, joint venturer of otherwise, and shall include any direct
or indirect participation in such enterprise as a consultant, licensor of
technology or otherwise.
(b) The Purchaser will not disclose or use at any time any
Confidential Information (as defined below) of which the Purchaser is or
becomes aware, whether or not such information is developed by him, except to
the extent that such disclosure or use is directly related to and required by
the Purchaser's performance of duties, if any, assigned to the Purchaser by the
Company. As used in this Agreement, the term "Confidential Information" means
information that is not generally known to the public and that is used,
developed or obtained by the Company or its subsidiaries in connection with its
<PAGE>
business, including but not limited to (i) products or services, (ii) fees,
costs and pricing structures, (iii) designs, (iv) computer software, including
operating systems, applications and program listings, (v) flow charts, manuals
and documentation, (vi) data bases, (vii) accounting and business methods,
(viii) inventions, devices, new developments, methods and processes, whether
patentable or unpatentable and whether or not reduced to practice, (ix)
customers and clients and customer or client lists, (x) other copyrightable
works, (xi) all technology and trade secrets, and (xii) all similar and related
information in whatever form. Confidential Information will not include any
information that has been published in a form generally available to the public
prior to the date the Purchaser proposes to disclose or use such information.
The Purchaser acknowledges and agrees that all copyrights, works, inventions,
innovations, improvements, developments, patents, trademarks and all similar or
related information which relate to the actual or anticipated business of the
Company and its subsidiaries (including its predecessors) and conceived,
developed or made by the Purchaser while employed by the Company or its
subsidiaries belong to the Company. The Purchaser will perform all actions
reasonably requested by the Company (whether during or after the Noncompete
Period) to establish and confirm such ownership at the Company's expense
(including without limitation assignments, consents, powers of attorney and
other instruments).
(c) Notwithstanding clauses (a) and (b) above, if at any time a
court holds that the restrictions stated in such clauses (a) and (b) are
unreasonable or otherwise unenforceable under circumstances then existing, the
parties hereto agree that the maximum period, scope or geographic area
determined to be reasonable under such circumstances by such court will be
substituted for the stated period, scope or area. Because the Purchaser's
services are unique and because the Purchaser has had access to Confidential
Information, the parties hereto agree that money damages will be an inadequate
remedy for any breach of this Agreement. In the event a breach or threatened
breach of this Agreement, the Company or its successors or assigns may, in
addition to other rights and remedies existing in their favor, apply to any
court of competent jurisdiction for specific performance and/or injunctive
relief in order to enforce, or prevent any violations of, the provisions hereof
(without the posting of a bond or other security).
(d) Notwithstanding the foregoing paragraphs (a), (b) and (c), the
provisions of any employment agreement in effect on the date hereof between the
Company and Purchaser which contains covenants relating to confidentiality and
competition shall supersede and replace the provisions of paragraphs (a), (b)
and (c) and shall be deemed incorporated by reference in this Agreement in
their entirety.
<PAGE>
IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date first above written.
BRUNO'S, INC.
By_________________________________
Name:
Title:
- --------------------------------------------------
__________________________________
Purchaser
___________________________________
___________________________________
Address of Purchaser
<PAGE>
EXHIBIT A
---------
Form of Non-Qualified Stock Option Agreement
Exhibit 4.5
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of ____________ ____, 199__, is made by and
between Bruno's, Inc., an Alabama corporation hereinafter referred to as the
"Company", and _____________________, an employee of the Company or a
Subsidiary (as defined below) or Affiliate (as defined below) of the Company,
hereinafter referred to as "Optionee".
WHEREAS, the Company wishes to afford the Optionee the opportunity to
purchase shares of its Common Stock, par value $.01 per share (the "Common
Stock");
WHEREAS, the Company wishes to carry out the Plan (as hereinafter
defined), the terms of which are hereby incorporated by reference and made a
part of this Agreement; and
WHEREAS, the Committee (as hereinafter defined), appointed to
administer the Plan, has determined that it would be to the advantage and best
interest of the Company and its stockholders to grant the Non-Qualified Options
provided for herein to the Optionee as an incentive for increased efforts
during his term of office with the Company or its Subsidiaries or Affiliates,
and has advised the Company thereof and instructed the undersigned officers to
issue said Options;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall
have the meaning specified in the Plan or below unless the context clearly
indicates to the contrary.
Section 1.1 - Affiliate
"Affiliate" shall mean, with respect to the Company, any corporation
directly or indirectly controlling, controlled by, or under common control
with, the Company or any other entity designated by the Board of Directors of
the Company in which the Company or an Affiliate has an interest.
<PAGE>
Section 1.2 - Cause
"Cause" shall mean, except as otherwise provided in an employment
agreement between the Company and the Optionee, (i) misconduct by the Optionee
involving dishonesty or breach of trust in connection with Optionee's
employment or (ii) conduct which (A) would be a reasonable basis for an
indictment of a felony or a misdemeanor involving moral turpitude and (B) is
reasonably likely to be injurious to the Company.
Section 1.3 - Code
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Section 1.4 - Committee
"Committee" shall mean the Compensation Committee of the Company.
Section 1.5 - Grant Date
"Grant Date" shall mean the date on which the Options provided for in
this Agreement were granted.
Section 1.6 - Management Stockholder's Agreement
"Management Stockholder's Agreement" shall mean that certain
Management Stockholder's Agreement dated as of ____________ between the
Optionee and the Company.
Section 1.7 - Options
"Options" shall mean the non-qualified options, which may include a
Time Option and/or a Performance Option, to purchase Common Stock granted under
this Agreement.
Section 1.8 - Performance Option
"Performance Option" shall mean an Option with respect to which the
commencement of exercisability is governed by Section 3.1(c) hereof.
Section 1.9 - Permanent Disability
The Optionee shall be deemed to have a "Permanent Disability" if the
Optionee is unable to engage in the activities required by the Optionee's job
by reason of any medically determined physical or mental impairment which can
be expected to result in death or which has lasted or can be expected to last
for a continuous period of not less than 12 months.
<PAGE>
Section 1.10 - Plan
"Plan" shall mean the 1996 Stock Purchase and Option Plan for Key
Employees of Bruno's, Inc. and Subsidiaries.
Section 1.11 - Pronouns
The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
Section 1.12 - Retirement
"Retirement" shall mean retirement at age 62 or over (or such other
age as may be approved by the Board of Directors of the Company) after having
been employed by the Company or a Subsidiary for at least three years after the
Grant Date.
Section 1.13 - Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.14 - Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations, or group
of commonly controlled corporations (other than the last corporation in the
unbroken chain), then owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
Section 1.15 - Time Option
"Time Option" shall mean an Option with respect to which the
commencement of exercisability is governed by Section 3.1(a) hereof.
Section 1.16 - Trigger Date
"Trigger Date" shall mean __________ __, 199_.
<PAGE>
ARTICLE II
GRANT OF OPTIONS
Section 2.1 - Grant of Options
For good and valuable consideration, on and as of the date hereof the
Company irrevocably grants to the Optionee a Time Option and/or a Performance
Option to purchase any part or all of an aggregate of the number of shares set
forth with respect to each such Option on the signature page hereof of its $.01
par value Common Stock upon the terms and conditions set forth in this
Agreement.
Section 2.2 - Exercise Price
Subject to Section 2.4, the exercise price of the shares of stock
covered by the Options shall be $12 per share without commission or other
charge.
Section 2.3 - Consideration to the Company
In consideration of the granting of these Options by the Company, the
Optionee agrees to render faithful and efficient services to the Company or a
Subsidiary or Affiliate, with such duties and responsibilities as the Company
shall from time to time prescribe. Nothing in this Agreement or in the Plan
shall confer upon the Optionee any right to continue in the employ of the
Company or any Subsidiary or Affiliate or shall interfere with or restrict in
any way the rights of the Company and its Subsidiaries or Affiliates, which are
hereby expressly reserved, to terminate the employment of the Optionee at any
time for any reason whatsoever, with or without cause.
Section 2.4 - Adjustments in Options Pursuant to Merger, Consolidation, etc.
Subject to Section 9 of the Plan, in the event that the outstanding
shares of the stock subject to an Option are, from time to time, changed into
or exchanged for a different number or kind of shares of the Company or other
securities of the Company by reason of a merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, combination of
shares, or otherwise, the Committee shall make an appropriate and equitable
adjustment in the number and kind of shares and/or the amount of consideration
as to which or for which, as the case may be, such Option, or portions thereof
then unexercised, shall be exercisable. Any such adjustment made by the
Committee shall be final and binding upon the Optionee, the Company and all
other interested persons.
<PAGE>
ARTICLE III
PERIOD OF EXERCISABILITY
Section 3.1 - Commencement of Exercisability
(a) Time Options shall become exercisable as follows:
Percentage of Time Option
Date Time Option Shares Granted As to Which
Becomes Exercisable Time Option Is Exercisable
After the first anniversary
of the Trigger Date 20%
After the second anniversary
of the Trigger Date 40%
After the third anniversary
of the Trigger Date 60%
After the fourth anniversary
of the Trigger Date 80%
After the fifth anniversary
of the Trigger Date 100%
Notwithstanding the foregoing, the Time Option shall become
immediately exercisable as to 100% of the shares of Common Stock subject to
such Option immediately prior to a Change of Control (but only to the extent
such Option has not otherwise terminated or become exercisable). A "Change of
Control" means (i) a sale of all or substantially all of the assets of the
Company to a Person or Group who is not an Affiliate of Kohlberg Kravis Roberts
& Co., L.P. ("KKR"), (ii) a sale by KKR or any of its Affiliates resulting in
(A) more than 50% of the voting stock of the Company being held by a Person or
Group that does not include KKR or any of its Affiliates and (B) more than 50%
of the seats on the Board of Directors of the Company being controlled by or
being designees of a Person or Group other than KKR or any of its Affiliates,
or (iii) a merger or consolidation of the Company into another Person which is
not an Affiliate of KKR. "Person" means an individual, partnership,
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other entity of whatever
nature. "Group" means two or more Persons acting together as a partnership,
limited partnership, syndicate or other group for the purpose of acquiring,
holding or disposing of securities of the Company.
(c) The Performance Option shall become exercisable with respect to
20% of the shares of Common Stock subject to such Option on each Vesting Date
following a Determination Date that the Company's Cumulative EBITDA equals or
exceeds the Cumulative EBITDA Target as of such Determination Date and the
actual EBITDA for that year equals or exceeds the EBITDA Target for that year.
If the Company's EBITDA for a Plan Year is less than 100% of the EBITDA Target
for such Plan Year (a "Missed Year"), no such Performance Option shall become
exercisable with respect to any additional shares of Common Stock on the
Vesting Date for such Plan Year. If, for any Plan Year subsequent to a Missed
Year, EBITDA exceeds the EBITDA Target and Cumulative EBITDA exceeds the
<PAGE>
Cumulative EBITDA Target, then any prior percentage of Performance Options in
respect of prior Missed Years shall become exercisable (but only to the extent
such Option has not otherwise terminated or become exercisable).
Notwithstanding the foregoing, the Performance Option shall become
exercisable as to 100% of the shares of Common Stock subject to such Option
after seven years after the Trigger Date (but only to the extent such Option
has not otherwise terminated or become exercisable).
(d) For purposes of Section 3.1(c):
(i) "Cumulative EBITDA" means with respect to any Performance
Option, the sum of the EBITDA for the Company and its consolidated
subsidiaries during the period commencing on _______ __, 199_ and ending
on the last day of the Plan Year preceding the Determination Date.
(ii) "Cumulative EBITDA Targets" means with respect to any
Performance Option, the sum of the EBITDA Targets for the period
commencing on _______ __, 199_ and ending on the last day of the Plan Year
preceding the Determination Date.
(iii) "Determination Date" means February 15 of each calendar year.
(iv) "EBITDA" shall mean, with respect to the Company and its
consolidated subsidiaries, net income before net interest expense, income
taxes, depreciation and amortization, writedown of property and
securities, extraordinary loss on extinguishment of debt, loss on disposal
of discontinued operations and loss from operation of discontinued
operations.
(v) "EBITDA Target" shall have the meaning ascribed to
such term in Schedule I hereto for Plan Years ____ through ____ and such
other targets as are established by the Committee with respect to
subsequent Plan Years; provided, that to the extent that the Company or
any of its subsidiaries disposes or acquires assets out of the ordinary
course of business the Committee will decrease or increase, as the case
may be, the EBITDA Target for such dispositions or acquisitions.
(vi) "Plan Year" means [(i) the period from January 28, 1996 to
January 28, 1996 with respect to Plan Year 1997 and (ii) thereafter,] the
period commencing on the day immediately succeeding the close of the prior
Plan Year until the Saturday closest to each January 31st.
(vi) "Vesting Date" means August 18th of each calendar year
commencing on ______ __, 199_.
(e) Notwithstanding the foregoing, no Option shall become
exercisable as to any additional shares of Common Stock following the
termination of employment of the Optionee for any reason other than a
termination of employment because of death, Permanent Disability or Retirement
of the Optionee and any Option (other than as provided in the next
succeeding sentence) which is non-exercisable as of the Optionee's termination
of employment shall be immediately cancelled. In the event of a termination of
employment because of such death, Permanent Disability or Retirement, the Time
Options (but not the Performance Options) shall immediately become exercisable
as to all shares of Common Stock subject thereto.
<PAGE>
Section 3.2 - Expiration of Options
Except as otherwise provided in Section 5 or 6 of the Management
Stockholder's Agreement, the Options may not be exercised to any extent by
the Optionee after the first to occur of the following events:
(a) The tenth anniversary of the Grant Date; or
(b) The first anniversary of the date of the Optionee's termination
of employment by reason of death, Permanent Disability or Retirement; or
(c) The first business day which is fifteen calendar days after the
earlier of (i) 75 days after termination of employment of the Optionee for
any reason other than for death, Permanent Disability or Retirement
or (ii) the delivery of notice by the Company that it does not intend to
exercise its call right under Section 6 of the Management Stockholder's
Agreement; provided, however, that in any event the Options shall remain
exercisable under this subsection 3.2(c) until at least 45 days after
termination of employment of the Optionee for any reason other than for
death, Permanent Disability or Retirement; or
(d) The date the Option is terminated pursuant to Section 5, 6 or
8(b) of the Management Stockholder's Agreement;
(e) The date of an Optionee's termination of employment by the
Company for Cause; or
(f) If the Committee so determines pursuant to Section 9 of the
Plan, the effective date of either the merger or consolidation of the
Company into another Person, or the exchange or acquisition by another
Person of all or substantially all of the Company's assets or 80% or more
of its then outstanding voting stock, or the recapitalization,
reclassification, liquidation or dissolution of the Company. At least ten
(10) days prior to the effective date of such merger, consolidation,
exchange, acquisition, recapitalization, reclassification, liquidation or
dissolution, the Committee shall give the Optionee notice of such event if
the Option has then neither been fully exercised nor become unexercisable
under this Section 3.2.
ARTICLE IV
EXERCISE OF OPTION
Section 4.1 - Person Eligible to Exercise
During the lifetime of the Optionee, only he may exercise an Option
or any portion thereof. After the death of the Optionee, any exercisable
portion of an Option may, prior to the time when an Option becomes
unexercisable under Section 3.2, be exercised by his personal representative or
by any person empowered to do so under the Optionee's will or under the then
applicable laws of descent and distribution.
Section 4.2 - Partial Exercise
<PAGE>
Any exercisable portion of an Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.2; provided, however, that any partial exercise shall be for whole shares of
Common Stock only.
Section 4.3 - Manner of Exercise
An Option, or any exercisable portion thereof, may be exercised
solely by delivering to the Secretary or his office all of the following prior
to the time when the Option or such portion becomes unexercisable under Section
3.2:
(a) Notice in writing signed by the Optionee or the other person
then entitled to exercise the Option or portion thereof, stating that the
Option or portion thereof is thereby exercised, such notice complying with
all applicable rules established by the Committee;
(b) Full payment (in cash, by check or by a combination thereof) for
the shares with respect to which such Option or portion thereof is
exercised;
(c) A bona fide written representation and agreement, in a form
satisfactory to the Committee, signed by the Optionee or other person then
entitled to exercise such Option or portion thereof, stating that the
shares of stock are being acquired for his own account, for investment and
without any present intention of distributing or reselling said shares or
any of them except as may be permitted under the Securities Act of 1933,
as amended (the "Act"), and then applicable rules and regulations
thereunder, and that the Optionee or other person then entitled to
exercise such Option or portion thereof will indemnify the Company against
and hold it free and harmless from any loss, damage, expense or liability
resulting to the Company if any sale or distribution of the shares by such
person is contrary to the representation and agreement referred to above;
provided, however, that the Committee may, in its absolute discretion,
take whatever additional actions it deems appropriate to ensure the
observance and performance of such representation and agreement and to
effect compliance with the Act and any other federal or state securities
laws or regulations;
(d) Full payment to the Company of all amounts which, under federal,
state or local law, it is required to withhold upon exercise of the
Option; and
(e) In the event the Option or portion thereof shall be exercised
pursuant to Section 4.1 by any person or persons other than the Optionee,
appropriate proof of the right of such person or persons to exercise the
option.
Without limiting the generality of the foregoing, the Committee may require an
opinion of counsel acceptable to it to the effect that any subsequent transfer
of shares acquired on exercise of an Option does not violate the Act, and may
issue stop-transfer orders covering such shares. Share certificates evidencing
stock issued on exercise of this Option shall bear an appropriate legend
referring to the provisions of subsection (c) above and the agreements herein.
The written representation and agreement referred to in subsection (c) above
shall, however, not be required if the shares to be issued pursuant to such
<PAGE>
exercise have been registered under the Act, and such registration is then
effective in respect of such shares.
Section 4.4 - Conditions to Issuance of Stock Certificates
The shares of stock deliverable upon the exercise of an Option, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares
shall be fully paid and nonassessable. The Company shall not be required to
issue or deliver any certificate or certificates for shares of stock purchased
upon the exercise of an Option or portion thereof prior to fulfillment of all
of the following conditions:
(a) The obtaining of approval or other clearance from any state or
federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(b) The lapse of such reasonable period of time following the
exercise of the Option as the Committee may from time to time establish
for reasons of administrative convenience.
Section 4.5 - Rights as Stockholder
The holder of an Option shall not be, nor have any of the rights or
privileges of, a stockholder of the Company in respect of any shares
purchasable upon the exercise of the Option or any portion thereof unless and
until certificates representing such shares shall have been issued by the
Company to such holder.
ARTICLE V
MISCELLANEOUS
Section 5.1 - Administration
The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke
any such rules. All actions taken and all interpretations and determinations
made by the Committee shall be final and binding upon the Optionee, the Company
and all other interested persons. No member of the Committee shall be
personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or the Options. In its absolute discretion, the
Board of Directors may at any time and from time to time exercise any and all
rights and duties of the Committee under the Plan and this Agreement.
Section 5.2 - Options Not Transferable
Except as provided in the Management Stockholder's Agreement, neither
the Options nor any interest or right therein or part thereof shall be liable
for the debts, contracts or engagements of the Optionee or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
<PAGE>
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that this Section 5.2 shall not
prevent transfers by will or by the applicable laws of descent and
distribution.
Section 5.3 - Shares to Be Reserved
The Company shall at all times during the term of the Options reserve
and keep available such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.
Section 5.4 - Notices
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Optionee shall be addressed to him at the address
given beneath his signature hereto. By a notice given pursuant to this Section
5.4, either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Optionee shall,
if the Optionee is then deceased, be given to the Optionee's personal
representative if such representative has previously informed the Company of
his status and address by written notice under this Section 5.4. Any notice
shall have been deemed duly given when enclosed in a properly sealed envelope
or wrapper addressed as aforesaid, deposited (with postage prepaid) in a post
office or branch post office regularly maintained by the United States Postal
Service.
Section 5.5 - Titles
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
Section 5.6 - Applicability off Plan and Management Stockholder's Agreement
The Options and the shares of Common Stock issued to the Optionee
upon exercise of the Options shall be subject to all of the terms and
provisions of the Plan and the Management Stockholder's Agreement, to the
extent applicable to the Options and such shares. In the event of any conflict
between this Agreement and the Plan, the terms of the Plan shall control. In
the event of any conflict between this Agreement or the Plan and the Management
Stockholder's Agreement, the terms of the Management Stockholder's Agreement
shall control.
Section 5.7 - Amendment
This Agreement may be amended only by a writing executed by the
parties hereto which specifically states that it is amending this Agreement.
Section 5.8 - Governing Law
The laws of the State of Alabama (or if the Company reincorporates in
another state, the laws of that state) shall govern the interpretation,
validity and performance of the terms of this Agreement regardless of the law
that might be applied under principles of conflicts of laws.
<PAGE>
Section 5.9 - Jurisdiction
Any suit, action or proceeding against the Optionee with respect to
this Agreement, or any judgment entered by any court in respect of any thereof,
may be brought in any court of competent jurisdiction in the State of Alabama
(or if the Company reincorporates in another state, in that state) or New York,
as the Company may elect in its sole discretion, and the Optionee hereby
submits to the non-exclusive jurisdiction of such courts for the purpose of any
such suit, action, proceeding or judgment. The Optionee hereby irrevocably
waives any objections which he may now or hereafter have to the laying of the
venue of any suit, action or proceeding arising out of or relating to this
Agreement brought in any court of competent jurisdiction in the State of
Alabama (or if the Company reincorporates in another state, in that state) or
New York, and hereby further irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in any
inconvenient forum. No suit, action or proceeding against the Company with
respect to this Agreement may be brought in any court, domestic or foreign,
or before any similar domestic or foreign authority other than in a court of
competent jurisdiction in the State of Alabama (or if the Company
reincorporates in another state, in that state) or New York, and the Optionee
hereby irrevocably waives any right which he may otherwise have had to bring
such an action in any other court, domestic or foreign, or before any similar
domestic or foreign authority. The Company hereby submits to the jurisdiction
of such courts for the purpose of any such suit, action or proceeding.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto.
BRUNO'S, INC.
By_______________________________
Name:
Title:
Aggregate number of shares of Common
_________________________ Stock for which the Time Option
granted hereunder is exercisable (50%
_________________________ of total number of shares):
Optionee
________________
Aggregate number of shares
of Common Stock for which the
Performance Option granted hereunder
is exercisable (50% of total number of
shares):
Address ________________
Optionee's Taxpayer
Identification Number:
_________________________
Exhibit 4.6
-----------
SALE PARTICIPATION AGREEMENT
_______________ ____, 199__
________________________
________________________
c/o Bruno's, Inc.
800 Lakeshore Parkway
Birmingham, Alabama 35211
Dear Management Stockholder:
You have entered into a Management Stockholder's Agreement, dated as
of _____________ ____, 199__ (the "Stockholder's Agreement"), between Bruno's,
Inc., an Alabama corporation ("the Company"), and you relating to the purchase
from the Company of shares of the common stock, par value $.01 per share, of
the Company. The undersigned, KKR Partners II, L.P., a Delaware limited
partnership ("KKR Partners"), and Crimson Associates, L.P., a Delaware limited
partnership ("Crimson Associates"), also have purchased shares of common stock
of the Company and hereby agree with you as follows, effective upon such
purchase of common stock by you:
1. In the event that at any time KKR Partners, or Crimson
Associates, as the case may be (each, a "Selling Partnership" and collectively,
the "Selling Partnerships"), proposes to sell for cash or any other
consideration any shares of common stock of the Company owned by it, in any
transaction other than a Public Offering (as defined in the Stockholder's
Agreement) or a sale to an affiliate of KKR Partners or Crimson Associates, as
the case may be, the Selling Partnership will notify you or your Purchaser's
Estate or Purchaser's Trust (as such terms are defined in Section 2 of the
Stockholder's Agreement), as the case may be, in writing (a "Notice") of such
proposed sale (a "Proposed Sale") and the material terms of the Proposed Sale
as of the date of the Notice (the "Material Terms") promptly, and in any event
not less than 15 days prior to the consummation of the Proposed Sale and not
more than 5 days after the execution of the definitive agreement relating to
the Proposed Sale, if any (the "Sale Agreement"). If within 10 days of your or
your Purchaser's Estate's or Purchaser's Trust's, as the case may be, receipt
of such Notice the Selling Partnership receives from you or your Purchaser's
Estate or Purchaser's Trust, as the case may be, a written request (a
"Request") to include Common Stock held by you or your Purchaser's Estate or
Purchaser's Trust, as the case may be ("Common Stock"), in the Proposed Sale
(which Request shall be irrevocable unless (a) there shall be a material
adverse change in the Material Terms or (b) if otherwise mutually agreed to in
writing by you or your Purchaser's Estate or Purchaser's Trust, as the case may
be, and the Selling Partnership), the Common Stock held by you will be so
included as provided herein; provided that only one Request, which shall be
executed by you or your Purchaser's Estate or Purchaser's Trust, as the case
may be, may be delivered with respect to any Proposed Sale for all Common Stock
held by you or your Purchaser's Estate or Purchaser's Trust. Promptly after
<PAGE>
the consummation of the transactions contemplated thereby, the Selling
Partnership will furnish you, your Purchaser's Trust or your Purchaser's Estate
with a copy of the Sale Agreement, if any. In the event that both KKR Partners
and Crimson Associates propose to sell shares of common stock in the Proposed
Sale, the term "Selling Partnership" shall refer only to Crimson Associates and
not to KKR Partners.
2. The number of shares of Common Stock which you or your
Purchaser's Estate or Purchaser's Trust, as the case may be, will be permitted
to include in a Proposed Sale pursuant to a Request will be the lesser of (a)
the sum of the number of shares of Common Stock then owned by you or your
Purchaser's Estate or Purchaser's Trust, as the case may be, plus all shares of
Common Stock which you are then entitled to acquire under an unexercised option
to purchase shares of Common Stock, to the extent such option is then vested or
would become vested as a result of the consummation of the Proposed Sale and
(b) the sum of the shares of Common Stock then owned by you or your Purchaser's
Estate or Purchaser's Trust, as the case may be, plus all shares of Common
Stock which you are entitled to acquire under an unexercised option to purchase
shares of Common Stock, whether or not fully vested, multiplied by a percentage
calculated by dividing the aggregate number of shares of Common Stock which KKR
Partners and Crimson Associates propose to sell in the Proposed Sale by the
total number of shares of Common Stock owned by the Selling Partnership or, in
the case both KKR Partners and Crimson Associates propose to sell in the
Proposed Sale, KKR Partners and Crimson Associates. If one or more holders of
shares of Common Stock who have been granted the same rights granted to you or
your Purchaser's Estate or Purchaser's Trust, as the case may be, hereunder
elect not to include the maximum number of shares of Common Stock which such
holders would have been permitted to include in a Proposed Sale (the "Eligible
Shares"), KKR Partners or Crimson Associates, or such remaining holders of
shares of Common Stock, or any of them, may sell in the Proposed Sale a number
of additional shares of Common Stock owned by any of them equal to their pro
rata portion of the number of Eligible Shares not included in the Proposed
Sale, based on the relative number of shares of Common Stock then held by each
such holder, and such additional shares of Common Stock which any such holder
or holders propose to sell shall not be included in any calculation made
pursuant to the first sentence of this Paragraph 2 for the purpose of
determining the number of shares of Common Stock which you or your Purchaser's
Estate or Purchaser's Trust, as the case may be, will be permitted to include
in a Proposed Sale. KKR Partners and Crimson Associates, or any of them, may
sell in the Proposed Sale additional shares of Common Stock owned by any of
them equal to any remaining Eligible Shares which will not be included in the
Proposed Sale pursuant to the foregoing.
3. Except as may otherwise be provided herein, shares of Common
Stock subject to a Request will be included in a Proposed Sale pursuant hereto
and in any agreements with purchasers relating thereto on the same terms and
subject to the same conditions applicable to the shares of Common Stock which
the Selling Partnership proposes to sell in the Proposed Sale. Such terms and
conditions shall include, without limitation: the sales price; the payment of
fees, commissions and expenses; the provision of, and representation and
warranty as to, information requested by the Selling Partnership; and the
provision of requisite indemnifications; provided that any indemnification
provided by you, your Purchaser's Estate or your Purchaser's Trust shall be pro
rata in proportion with the number of shares of Common Stock to be sold.
4. Upon delivering a Request, you or your Purchaser's Estate or
Purchaser's Trust, as the case may be, will, if requested by the Selling
<PAGE>
Partnership, execute and deliver a custody agreement and power of attorney in
form and substance satisfactory to the Selling Partnership with respect to the
shares of Common Stock which are to be sold by you or your Purchaser's Estate
or Purchaser's Trust, as the case may be, pursuant hereto (a "Custody Agreement
and Power of Attorney"). The Custody Agreement and Power of Attorney will
provide, among other things, that you or your Purchaser's Estate or Purchaser's
Trust, as the case may be, will deliver to and deposit in custody with the
custodian and attorney-in-fact named therein a certificate or certificates
representing such shares of Common Stock (duly endorsed in blank by the
registered owner or owners thereof) and irrevocably appoint said custodian and
attorney-in-fact as your or your Purchaser's Estate's or Purchaser's Trust's,
as the case may be, agent and attorney-in-fact with full power and authority to
act under the Custody Agreement and Power of Attorney on your or your
Purchaser's Estate's or Purchaser's Trust's, as the case may be, behalf with
respect to the matters specified therein.
5. Your or your Purchaser's Estate's or Purchaser's Trust's, as the
case may be, right pursuant hereto to participate in a Proposed Sale shall be
contingent on your or your Purchaser's Estate's or Purchaser's Trust's, as the
case may be, strict compliance with each of the provisions hereof and your or
your Purchaser's Estate's or Purchaser's Trust's, as the case may be,
willingness to execute such documents in connection therewith as may be
reasonably requested by the Selling Partnership.
6. The obligations of KKR Partners and Crimson Associates hereunder
shall extend only to you or your Purchaser's Estate or Purchaser's Trust, as
the case may be, and no other of your or your Purchaser's Estate's or
Purchaser's Trust's, as the case may be, successors or assigns shall have any
rights pursuant hereto.
7. This Agreement shall terminate and be of no further force and
effect on the fifth anniversary of the first occurrence of a Public Offering
(as defined in the Purchase Agreement).
8. All notices and other communications provided for herein shall be
in writing and shall be deemed to have been duly given when delivered to the
party to whom it is directed:
<PAGE>
(a) If to KKR Partners or Crimson Associates, to it at the following
address:
c/o Kohlberg Kravis Roberts & Co.
2800 Sand Hill Road
Suite 200
Menlo Park, California 94025
Attn: James H. Greene, Jr.
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attn: David J. Sorkin, Esq.
(b) If to you, to you at the address first set forth above herein;
(c) If to your Purchaser's Estate or Purchaser's Trust, at the
address provided to such partnerships by such entity;
or at such other address as any of the above shall have specified by notice in
writing delivered to the others by certified mail.
9. The laws of the State of Alabama (or if the Company
reincorporates in another state, of that state) shall govern the
interpretation, validity and performance of the terms of this Agreement. No
suit, action or proceeding with respect to this Agreement may be brought in any
court or before any similar authority other than in a court of competent
jurisdiction in the States of Alabama (or if the Company reincorporates in
another state, of that state) or New York, as the Selling Partnerships may
elect in their sole discretion, and you hereby submit to the non-exclusive
jurisdiction of such courts for the purpose of such suit, proceeding or
judgment. You hereby irrevocably waive any right which you may have had to
bring such an action in any other court, domestic or foreign, or before any
similar domestic or foreign authority.
10. If KKR Partners or Crimson Associates transfers its interest in
the Company to an affiliate of KKR Partners or Crimson Associates, as the case
may be, such affiliate shall assume the obligations hereunder of KKR Partners
or Crimson Associates, as the case may be.
It is the understanding of the undersigned that you are aware that no
Proposed Sale presently is contemplated and that such a sale may never occur.
<PAGE>
If the foregoing accurately sets forth our agreement, please
acknowledge your acceptance thereof in the space provided below for that
purpose.
Very truly yours,
KKR PARTNERS II, L.P.
By: KKR Associates L.P., the
General Partner
By:
---------------------------
CRIMSON ASSOCIATES, L.P.
By: KKR Associates L.P., the
General Partner
By:
---------------------------
Accepted and agreed to:
By: __________________________
___________________________
Exhibit 5.1
[Bruno's, Inc. Letterhead]
August 5, 1996
Bruno's, Inc.
800 Lakeshore Parkway
Birmingham, Alabama 35211
Ladies and Gentlemen:
I am Assistant General Counsel for Bruno's, Inc., an Alabama
corporation (the "Company"), and have advised the Company in connection with
the preparation and filing by the Company with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Securities Act"),
of a Registration Statement on Form S-8 (the "Registration Statement") relating
to the issuance by the Company of 2,050,000 shares of the Company's Common
Stock, par value $.01 per share (the "Shares"), pursuant to the 1996 Stock
Purchase and Option Plan for Key Employees of Bruno's, Inc. and Subsidiaries
(the "1996 Plan").
I have reviewed the corporate action of the Company in connection
with the issuance and sale of the Shares and have examined, and have relied as
to matters of fact upon, originals or copies, certified or otherwise identified
to my satisfaction, of such corporate records, agreements, documents and other
instruments and such certificates or comparable documents or oral statements of
public officials and of officers and representatives of the Company, and have
made such other and further investigations as I have deemed relevant and
necessary as a basis for the opinions hereinafter set forth. In such
examination, I have assumed the genuineness of all signatures, the legal
capacity of natural persons, the authenticity of all documents submitted to me
<PAGE>
as originals, the conformity to original documents of all documents submitted
to me as certified or photostatic copies, and the authenticity of the originals
of such latter documents.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, I hereby advise you that in my opinion the issuance
of the Shares has been duly authorized and, when issued and sold as
contemplated by the 1996 Plan, such Shares will be validly issued, fully paid
and non-assessable.
I am a member of the Bar of the State of Alabama and I do not
express any opinion herein concerning any law other than the law of the State
of Alabama.
This opinion is rendered to you in connection with the above
described transactions. This opinion may not be relied upon by you for any
other purpose, or relied upon by, or furnished to, any other person, firm or
corporation without my prior written consent.
I hereby consent to the filing of this opinion of counsel as
Exhibit 5.1 to the Registration Statement.
Very truly yours,
/s/ R. Michael Conley
R. Michael Conley
Assistant General Counsel
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statement of
Bruno's, Inc. on Form S-8 of our report dated April 12, 1996, appearing in the
Annual Report on Form 10-K of Bruno's, Inc. for the thirty week period ended
January 27, 1996.
/s/ Deloitte & Touche
Birmingham, Alabama
July 31, 1996
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated August 18, 1995
incorporated by reference in the Company's Form 10-K for the year ended July 1,
1995 and to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Birmingham, Alabama
July 31, 1996
